oca an

eve o
e
en

1ona
and regional development is an increasingly global issue. For localities and
the challenge of enhancing prosperity, improving well-being and increasing
hvtng standards has become acute for localities and regions formerly considered discrete
parts of the 'developed' and 'developing' worlds. Amid concern over the definitions
and sustainability of ' development' , a spectre has emerged of deepened unevenness and
sharpened inequalities in the development prospects for particular social groups and
territories.
Local and Regional Development engages and addresses the key questions: what are
the principles and values that shape definitions and strategies of local and regional devel-
opment? What are the conceptual and theoretical frameworks capable of understanding
and interpreting local and regional development? What are the main policy interven-
tions and instruments? How do localities and regions attempt to effect development in
practice? What kinds of local and regional development should we be pursuing?
Local and Regional Development addresses the fundamental issues of 'what kind of
local and regional development and for whom?', frameworks of understanding, and
instruments and policies. Local and Regional Developn1ent outlines what a holistic,
progressive and sustainable local and regional development might constitute before
reflecting on its limits and political renewal. With the growing international importance
of local and regional development, this book is an essential student purchase, illustrated
throughout with maps, figures and case studies from Asia, Europe, and Central and North
America.
Andy Pike is Senior Lecturer in the Centre for Urban and Regional Development Studies
(CURDS), University of Newcastle, UK.
f
G hy in the Departtnent of
Andres Rodriguez-Pose is Professor o Economic eograp
Geography and Environment, London School of Economics, UK.
. 1 G vemance and Director in the Centre for
John Tomaney is Professor of Regtona
0
. .
1
UK
S
d' (CURDS) Untverstty of Newcast e,
Urban and Regional Development tu tes '
......... dy Pike, Andres Rodriguez-Pose
and J o Tomaney
Routledge
Taylor & Francis Group
LONDON AND NEW YORK
f ,,-..r pubh'hcd 2006
bv Roudcdgc \bJnc ... ,don. Ox on OX l 4 ..tR
11 n Park ...
qtJare \
1
to
' Par,..
- h L \ and Canada
. I ousl\ pubiJ'-hcd in t c
smw rane .
by Routledge . , . \ y I 0016
, .... \ C\\ ) ork.
1\JaJt'ion I'"\' t:.
. . ..
1
o( the T'avlor & Francis Group. an inform a hu\ ine\'\'
Routledge /.r an unpl m . . ..
P
l. Andre Rodrigutz-Po\"' and John Ton1anc.r
2006 Andy 1"e. ._
. Time' '\ew Roman by
Tvp\? cr m .
d Ltd toodlete.h. Devon
florence Pro uctwn ...
Printed and bound in Great Britain by
TJ fnremational Ltd. Padsrow. ComwaJl
All ed. No pan of this book 1nay be reprinted or
rcprodm:ed or utili)cd in any form or by any electronic,
mechanical. or other mean . now knO\\'n or hereafter invented.
including photocopying and recording. or in any information
or retrieval system. without petmission in writing from
th(" publi her ..
Brilish LibraiJ Cataloguing in Publication Data
A catalogue record for thi:s book is available from the British Library
Librm)' of Congre')s Cataloging in Publication Data
Pike. Andv 1968-
..
Local and regional derelopment I Andy Pike,
Andres Rodriguez-Pose and John Tomaney.
p. em.
Includes bibliographical references and index.
I. Ulobalisation-Economic aspects. 2. Regional ceo nomic::>.
Regional planning. 4. Regionalism-Economic aspects.
:>. Economic development. I. Rodriguez-Po e. Andres.
IJ. Tomaney. John 1963- Ill. Title.
HF 1 359.P545 2006
338.9-dc22
ISB 10: 0-415-35717-9
ISBN I 0: 0-415 35718 7
JSBNIO: 0. 203-()0306-3
2006005421
ISBN 13: 978 0-415-35717-3 (hbk)
ISB 13: 978 0--415-35718-0 (pbk)
JSB 13: 978 0 203-00306-0 (cbk)
For Michelle, Ella, Connell and my
For Leticia, Luis and Laura
parents
For Helen and Kate
CONTENTS
List of plates
Li\1 of figure'>
List of table!,
Li"it of examples
A ckno'l-v!edgement.s
Li vt
PART I Introduction
I Introduction: local and regional development
2 V./hat kind of local and reg1onal de\elopmcnt and for whom?
PART II Frame\\Orks of understanding
3 Concepts and theories of local and regional dc\clopment
4 Institutions: go\ emment and go\ emance
PART III lnter,entions: instruments and policies
5 Mobilising indigenous potential
6 Attracting and embedding resource:,
PART IV Integrated approaches
7 Local and regional development in practice
8 Conclusion.
Selec1cd web.\ites
References
lndf!x

VIU

lX

Xl

Xlll

XI V

XVI
1
3
23
59
61
l
,..,
_ _,
153
155
175
195
197
253
273
J7-
- )
299
..
PLATES
II
. b
1

0
th r1 t' ,f \ sia: the Singapore waterfront
" .
and rcgwnal de\ lopmcnt a .. a poverty and
I li
m th d '\'dop d and dcvc optng. wor c
3. 1
Public .mel political agency: antt-poJJ tax and
anti-warrant <tk mar ht 111 ... cot land during the I 990s
\Vaterfrom urban reg neratton: the Qua) side in castle upon
Tvnc in \ orth East England
-
engineering in old industrial regions: shipyards on the
River T in North Ea:,t Enuland
- -
High-tc(hnology grO\\ th poles: a micro- and nanotechnology centre
under in Grenoble. France
4 .I De\ olved go\ the Parl iament in Edinburgh
4.2 Transnational intrastructure connections: the 0resund Bridge
between Denmark and Sweden
5 .I
Growing indigcnou-- bu'"' ine scs: a smal l fi nn incubator in Eindhoven
the \ etherlands
'
- )
'-
6. J
7. 1
Supporting bu : a technology park in Dortmund. Gem1any
Transnati onal corporati ons: global fi rms in Sydney, Australi a
Dec.ay in an old industri al region: housing stock abandontnent in
7.2
8. )
8. 2
8.3
Easmgton in North East England
connections: the International Financi al Services Centre,
Dublm. Ireland
Indigenous fair trad
. c. woman entrepreneur and local Tunari brand
of Jeans at a trade fair in Cochabamba. Bolivia
The state and public serv , . .
Th . . tces. a maternity 111 Sornaha
e polntcs of local and . I
a,. h . . regtona development: demonstrating
gamst t e abohtJOn of the I L
(ILEA) d nner ondon Education Authority
unng the 1990s
6
32
36
41
42
I 0 I
131
) 41
163
168
) 85
201
230
264
269
270
FIGURES
1. 1
2. )
2.2
2.3
2.4
2.5
3 . I
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3. 1 ()
3. 1 1
3. J 2
3. 13
3. 14
3. 15
4. 1
4.2
4.3
4.4
4.5
4.6
5. I
6. I
7.]
7.2
.the ri sks of local and regional development strategies
European Spat1al Perspecti ve
The Ku/ ncts invcrtcd-U hypothesis
A and equality of di stribution by country, 2002
C oeffic1ent of rcg1onal variation of age-adjusted mortality rates by
country. 2000
Trade-offs between cohesion, efficiency and rights
The determi nants of regional output gro\vth
The capital/labour ratio
Ex port base theory
C umul ati ve regional growth
The Dixon- Thirlwall model of regional growth
theory
Long waves of economic growth
Spatial di visions of labour
Interacti ve model of innovation
Data, infonnati on and knowledge
Endogenous growth theory: the dctennination of labour product1vity
Donor-recipient and growth-oriented models of regional policy
Porter' s diamond model for the comp<:titive advantage of nations
The pyran1id model' of local and regional competitiveness
The 'economic in capitali sm and non-capitalism
Publ ic expenditure and C1DP per head by region in Italy. 2000
Emi lia Romagna. Ital y
The revi on- l:: R \ ' ET rdationship
0
The A 8( region. Bra/i I
The region. Denmark and Sweden .
Fragment of an emergi ng global hierarchy of economic and
political relati ons . d b)' countr)' 2001
. . . J nt in tertiary c ucauon
Regional vanat1ons tn cnr o mt.:
Global FDI indicators
North East England. Unitc.:d Kingdom
GV A per head, English regions. 1990 2003
15
48
52
53
53
54
63
64
71
74
75
78
83
85
96
98
104
106
11 I
114
119
126
135
136
138
140
144
170
177
199
202
Ontario. Canada
7
.3 GOP at market for selected pro\ incc, and
7.4
Canada. 1989 2003
7 ::,

Total emplo) ment ('000) and uncn1ploytncnt rate (o/c,), Ontario,
J960 2001
ilicon \'ailey. California. United States
7
'
7
6
Lmplo)ment and technological in Silicon Valley, 1970 200
1 7.
7
.8 Busan, South Korea
7.9
7.10
7. II
Ireland
Cost of payroll, elected 1995
Sc' illc. Spain

7.12 Sc' ille stratcgJc '1 1011
7.13 The pillar of Sc\ illc de\ cloprncnt strategy
7.14 GDP in Sc\ iJic. Andalusia and pain. 1980 -2001
7. I 5 Lncmplo}ment in Sc\ illc and Spain, 1986 2002
7.16 Jalisco. \texico
7.17 GOP per capita. Jali')co and \ttcxico, 1970-2001
7. 18 Salary structure in the Guadalajara tvfetropolitan Area, 1994 2000
8. 1 The lLO framework for Decent Work, Human Development and
Local Development
207
207
213
21 6
220
227
231
236
238
240
241
242
244
245
246
260
;
TABLES
1.1
1.2
1.3
2. 1
2.2
2.3
2.4
2.5
2.6
3. I
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3. 1 l
3. 12
4.1
4.2
5. I
5.2
5.3
5.4
6.1
6.2
7. 1
Variance of the log of regional C1DP per capita. 1980-2000
TcJTitorially competitive policies
Top-do\vn and bottom-up local and regional development approaches
The eras of developtnentalism and globalism
Main views of development' and their relations to capitalism
Scales, socio-economic and institutional agents
Distinctions in local and regional development
The objects and subjects of local and regional development
Pol icy instruments for local and regional development
Regional growth disparities in the European Union, 1980 200 I
\leo-classical regional policy: the free-market' approach
G D P, FDl and exports by coastal and inland regions in China. 1999
Nco-Keynesian regional policy: the 'interventiontst' approach
The product life cycle
Profi t cycles and regional de\ clopment
Fordism and flexible accumulation
Instituti onal environment and arrangements
Superstructural elements for strong and weak regional systems of
innovation (RS I) potent ial
From mass product ion to learning regions
A typology of new' growth theori es

Principles for sustainable regcneratton . .

Regional and subnati onal go\ crnment in OECD countnes and m
South Africa . d t't t'on
Traditional top-down and new model bottom-up pol ictes an ms J u I s
. . G I I 989 199?
Start-up intensity by locality and reg JOn tn ennan). -
Foundations of entrepreneurial \ k t in the United Kingdom,
Regional structure of the venture capt tal mar e
199R- 2002
Firm sizes by employment d .
1
development implications
Dimensions of plant type and local an. rcgwna
f
d nvestmcnt agenctcs
Functions o mwar
1
Ontario sdected years. 1955 200 I
Sectoral cornposition of employment.
9
12
17
27
34
37
39
49
50
67
68
72
76
80
81
88
91
97
100
103
116
132
134
t5l)
160
162
16)
18]

xl' TAB LES

- ....
I._.,
7 4
7.6
7.7
'"'8
'9
7.10
. . d J'\tnc-.. rn Ontario. 19l)l)
Tt)p ten manutactunng
111
t .
1
)\ ...
111
.
1
ncc in SiltL'On
I
... n ot gl L
Economtc eras and t H.:Jr ton . -
Vallcv. l . I 050s .., ')
. ... I .... d L _(}(L .
Ot.tf'ut per capttn. edt: .. t
1
mc pn
lcdian household income. ll
I t d l r
..... (_l"lQfl'\.
p0,, er. "e cc c .. ....
\\eight of GOP regions. South Kon:.l.
.... ,, . ,. GOP ()r
0
,, th rate. ireland.
Annun' <l\ 1
Destination of C\ports. Ireland. 2004
. . t 'n rr "''lt1d .,003
Forc1gn m' est men t t: ' -
S\\ OT anal) is for c' ille. I
198.:\ 2000
199.-
214
223
")")!.)
--<'
228
232
237
I
EXAMPLES
2. 1
') ?
--
2.3
2.4
2.5
2.6
2.7
3. I
3.2
3.3
3.4
4. l
4.2
4.3
4.4
5. 1
5.2
5.3
6.1
6.2
8. I
8.2
8.3
8.4
Broadening the tncasures of de, clopmcnt
Global trade disputes and local l!conomic ln,tability
The 'high. and Jol\. roads of local and regional
Pnnc1plcs and 1alucs of as<,ociati\c cntrcprcncuriali;m in \\-ales
Stnart gro\\ th and local and regional de' clopmcnt
C01nn1unity Econatnic Oc, clopment
Gcnder-sensiti\ e regional de\ elopmcnt
Regional convergence and di\ crgcnce in the European Union
Regional disparities in China
Cluster policy for local and regional de\elopmcnt
Capitalism, non-capitalism and community
Characteristics of 'go\ ernance
The constitutional duty to promote sustainable de\ clopment in \Vales
The I itnits of local and regional entrcprcncuriallsm
The i n1portance of government
The Cincinnati Minorit) and I cmalc Business Incubator. United States
The Bangalore technology hub. India
The cotnpctencies-based economics formation of enterprise for
SM E training. Germany
Nc\v locations for FDI
Cri sis in Si li con Glen
Sustaining local and regional economics
Internati onal fair trade and local de\clopmcnt
Local ising the food chain through creati\ e public procurement
Dcrnanufacturing. recycling and local de\ elopmcnt
30
38
43
46
47
) I
5)
66
72
I 13
119
128
142
146
151
164
169
172
1
19?
261
262
264
?6-
- )

. , h' b .. n a and ably collecti\ c cndea\ our. Thanks
\VrilliH.! thb t: , .,
.... Jd c 'our1,,mu tP .. 1o ue\ dop our Ol!Cd for a textbook tnto the task
to \mill'\\ \lou tor cnc "c c ... . . . . .
. . . b , d tor -.upponmg along the The..: tn 1ghts and rumtnatJOns
ot \\ ntrng a tc\t an . ._ . .
"' h 0 , idcJ Jtbprntion The Centre tor Lrban and Rcgtonal De\ elop-
of colkJgue" a\ e pr ' . .
... J .. (CLRD ) uni' cr-..rtv or' '\e\\ continues to provtde a
111t'nt tu te . . . .
d It re 111 Pat1tcular \\ e ha\ c '' elcomed the ad\ 1ce and cntJctsm of Young-
conlc\t an cu u ' ""
Chool Choi. \ 1ike Coombes. Stuart Da\\ Icy. Andy Gillespie. Sara Gonzalez. Nick
Hcnrv. Peter Hetherington. Lynne Humphrey. r\eill .Wiarshall, Peter O'Brien, Jane
Polla;d. Ranald Richard on and Ali'>on Stcnning. The participants in the Local and
Rc!!ional Dc\elopment programmes at CURDS and the Local Economic ....
De\ clopment programme ar the London School of Econon1ics ha\ e provided a tough
proving ground tor many of the idea!> developed in the book. \Ve thank them for their
input. \\c al o ackno\\'ledgc David Gro\ er's re earch support for parts of Chapter 5.
The final manuscript ha benefited from the comments of the anonytnous re\ ie\\ers. We
thank them for their in engagine with our \Vork. Thanks to :\11 ichelJe \Vood for ..... ._ ._
the co\er art and David Hume for the rnaps. V1iche1e Allan for help \vith the
image and in particular Sue Rob on as well as An1anda Lane for sorting out the manu-
. cript. Andy Pike would like to thank \l ichelle. El la and Connell for all their support.
Andre Rodriguez-Pose is grateful to the Royal Society-Wolfson Research Merit A \vard
for fi nancial support during the writing of this book.
\\'e arc grateful to those listed for pennission to reproduce copyright material :
Figure 2.3
Figure 3.10
Figure 3. 15
'Average prosperity and equality of distribution by country, 2002, in
R ea/i::ing Canada J Prosperity Potem ia I ( 2 005). reprinted with the perm is-
Institute for Competitiveness and Prosperity, Toronto.
Data mfonnation and knowledge' by Burton-Jones. A. ( 1999) Know-
ledve Canital 0 t' d 0 . .
. c .. r l .\ m. x or . xford UntYerstty Press.
The economic" 1 .
. . . m captta tsm and non-capital itn by Ken Byrne 1 n
lmagmmg and Enact' , N
, .... . mg oncapttahst Futures', Community Economies
Collectt ve (200 1) ( , , .. . . .
... . \\i\\ '' .con1mumtycconomacs.org. repnnted w1th pcnnts-
ston of Professor Katherine Gibson.

ACKNOWLEDGEMENTS
Figure 4.6 Fragtn\.:nt of an g\oha\ hierarchy of economic and political rela-
tions' by <;cott. A. ( \ 99R) in l<c:girms uml the World Economy: The Coming
Shupe of Glohal Production. with the permission of Oxford
1 "ery dTort hac.; been made to contact copyright holders for their permission to reprint
rnatl!rial in this book. The publisher would be grateful to hear from any copyright holder
v.. ho ic.; not here acknowledged and \".' i\\ undertake to rectify any errors or omissions in
future of this book.
\sian '\ation
[ \\
CtC
CLD
CPE
El:C
bPl
f t . .
. \
0
1. p ':Hl ConunUJHttes
. ()r the L uro L.
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. Vc'
11 P
l :w ned
centra \
. f . 111' \mJc Com mum ty
Europ an LL v
rt Pfo
N ..
E '-PO "'" - ::::
FL'
FDI
FF/
FTAA
G\TT
GDP
G\P
GVA
fLO
IMF
LETS
1\f&A
!\Jercosur
\1.\C
,\1 \\'
\:\FTA
\ESC
NL'TS
OECD
R&D
RDA
T C
1UC
U
VAT
W10
Europe3n Lmon
forci!!n direct In\ c: tmcnt
..
Free Economic Zone .
Free Trade . \rea of the t\menca.
Geneml Agrccmcn! on Tariff and Trade
QTO . dome product
::::
gros national product
..
gro- , alue added
.... . .
lnremational Labour
lnternarjonal Fund
Local E\change Trading Schemes
merger and acquistition
.tlercado C omtin del Sur
multinational corporation
minimum "aee
....
7\orth American Free Trade :\grcen1ent
Natjonal Economic and Social Council
Nomenc!mure des L 'niles Territoriales Statistiques (Non1cnclature of
Territorial Units for Statistics)
Organisation for Economic Cooperation and DcYelopment
research and dc,elopment
regional development agency
:-;mall and medium- izcd enterprises
tran. national corporation
Trades Union Congress
Unircd Narions Conference on Trade and Dc\'elopmcnl
value added tax
\Vorld Trade Organisation
..
INTRODUCTION:
LOCAL AND REGIONAL
DEVELOPMENT
Introduction: local and regional development in a
global context
and regional development has become an increasingly important activity for
natiOnal as well as local and regional governments across the world since the and
1970s. In parallel, the context for local and regional development has been dramaticallv
reshaped by deep seated changes in the pattern of economic activity and has
significantly more challenging. First. an alleged qualitative shift has taken place tO\\ards
a more reflexive' capitalism characterised by heightened complexity, uncertainty. risk
and rapidity of economic: social, political and cultural change. The economic system
has become more inten1ationalised: even knowledge intensive and compet-
itive. \Vhi]e the Jong-tenn prospects for the emergent global economy remain uncertain,
there is little doubt that its contemporary emergence has raised the spectre of deepened
unevenness in the prospects for development for particular social groups and territories
and sharpened geographical inequalities in prosperity and well-being. The inclusive and
sustainable nature of territorial growth and development has begun to be chaHenged.
Fundatnental questions about what constitutes and development' in localities
and regions are being posed. .
and closely related. stntctures of government and governance are
into tnultilevel. often devolving working across and between the locaL rcg10naL
subnational, and supranational scales. Existing institutions have been
iscd new institutions have emerged and new relations. often based around partnershtp
dominated the governance of local and regional development. Third._ the reshaped
h 1 t d ew interventiOns.
terrai n of local and regional de' elopment as stlmu a e n . ... f
. . . k. h both internal and external tornh \.'
instrurnents and public pohctcs, see mg to amcss . .
. . . d . ns have been able to exercl e
growth and development. Different localtttes an regJO . l . nd
. . . xisting and de\elopmg ne\\ approac 11..;
di ffering degrees of agency tn tcshapmg e. ....
cxperirncnts for local and regional development. h 'e shifted from a fo us on
1 d Tonal development a'
Fourth, debates about loca an rcgt . . . l"t T itiallv thi. involved a
. ncem wtth tb qua 1 Y n .
the quanttty of development to a co
1
r" onment and the
. . d ' I cnt on the natura ern tr .
on the 1111pact of economtc e\ c opm . e general concern \\ 1th ques-
b t has evolved tnto a mor
thi s placed on development. u ' . h . .
1
nable de\'f.dopmem has become
. . f ). c: Th. s new concern wtt .\uLs w
tJons of the qua1tty o ti e. 1
I l T R 0 0 U C T I 0 N 1
. . r, hi<,hh contesfc(. H:IL' att: man\ tl .
1
.
. rn 1lir;ttll>f1.s d t:
0
..:
. l 1 the tcnn and tt.s
1
I .
1
P" the kno\\ n that o t tht: \\ .
11
1Cf\ t. 1ll , lt but pt:t h ot t
J . . taintbk de\ dopmt:r
1
1
.- nt or Brundtland C wll.
1
nttton.s l' .... u, 4 ' d Dl'' t' opn \. . . , tc l
. . nn Frn '
111
J. of the present without COtHpromising tl
Clltllllll.s.sl011 l J 'IHL'L'"' thL' rl\.'d' . . . k
.r. d, lopmrnt whiCh . .
11
( \\ nrld ( on l!. nvir)
calb H) I t:\ L .. e r rhcH tn'
.,. f't'tttun: UL'ntratwn:-; hl Ill c.;; I . J timtton stiJI lea' L'" 'Cope r').
3 hI It)' 0 - (
7
\) Ul 1 ,1 <. l: . l I
. n 1 DL,dopmcnt I )l l()()
4
)
1
\t onL' L'lld of the conttnuunl <liC ltpproach,
rncnt .1 1. . liJim!!ton . . \.:s
1 t, (SCt' \\ tlhams and 1\ --
1
.
1
. for 111 wnce. on the de\ dopn1ent ot rent!\\ _
(tt')pu c.. tt 'tt ttnd to Oll .
1 t111nbk de' doprntnt h
1
>t'tttJ.t)n of ccs. and rr
11
th
to '-l" ' \ , , tliricnt cxp t < .. c
.11)k and tht: morL c..
1
.
1
()f {'\otncttnlcs dcscnbcd as 'ccologictJ
' t . t ) ceo Oi!lL J t . c
in tldlllolo,gtcal ( - , environmental pract1ccs thcrnscl vcs can help
I tht-.. perspcctt\t.
rnodcrm-..:HIOn ).
11
, th (Gi bbs 2000: \lurphy 2000a). At the other
j f c..com>mr gro ' .
.stimulate nt'\\' roUJl('
0
.
1
. ll
1 1
inabtlitv that tend to \ rC\\' the resource
5
of
. . are o .., l
end ot the continuum , tl Jed
10
a focu" on hn1rt1ng cconotntc growth. or
,. fi'teund.con\ . .'qucn),' .
the pl.ln t 'b
01
. .
1 1
tt r \ icw ocncraJJy tnvoh C5 a cnt tque of the
d . o it Ccrtaml). tll
1
t ::- . .
L'\c..'n r' uun.:- . cuce of indu trial soctet) and. tnstead. a on the
dl , -fuJ con ...umpuon prd L f .
e ) . , h r than the production and consun1pt1on o tnaten al goods
P
romotion of.,, cll-bemg rat . .
. , t, ,, and local de' clopment strategtes whtch arc
and an on gn.:a c r 'L . . .
f
,
1
J JUOO) At whiche' cr potnt on the conttnuum, mainstream
r<..' pcctful o nature " ,me - . . . . . , .
t'l . 1 . ld rc 1ional de' dopmcnt look too econotnJsttc when mcasutcd
L'OnccptJon.., o oca df . . .
h b., ot st"ta1nablc dcvelor1mct1t whtle tradtttona] measures of growth offer,
a1!amst t c ru 11c . o t .
a; bL)t. onlv a partial or intcnncdiatc indicator of derelopnzent. Movtng from the former
10 the new metric of local and regional developn1ent, which focus not
JU t lH1 job. and but more broadly on the quality of life (Morgan 2004: '>Ce
also Nu. baum and S<..'n 1993; en J 999 ).
An important driver of the changes in the context of local and regional developn1cnt
has b\!cn the proc<..' of global Through its increased mobi 1 i ty of capital. \vorkers,
and . en globali)ation i changing the rule by which the cconon1y has been
governed during much of the post-war era. Globalisation - \\hich, to a certain extent,
may be a political and socially constntcted concept by states and nco-liberal econon1ic
actors (Peck 1999; Jcs. op 2002) is exposing e\ en the most remote spaces to compe-
tition and forcing firms. and regions to react and adjust to the new econon1ic
condi tions. Lconomic nnd social actors across the "vorld arc rcstructurincr their produc-
. b
tJOn and. consumption habits as a result. Thi s process offers nc\v potential s and chal-
lenges. Some firms and places acros tt ld h d d
. . ' s wor ave graspe the opportun1t1es presentc
by a
0
lobaltsmg economv a d t . , , bl. h ..
, .... J n 1c.tvc est,t ts cd condtttons whereby they cuJTently reap
benchts. I lowe\ cr th, , t' . . . .
. . . ... . c opentng o nattonal econon11es 1s also revealtng local and
cconomtc f . I ,. I . .
r. r es \\It 1 ttt C or DO Capactty tO COtnpcte in a globalJ sed
en' "onmcnt. rhc ex posurc of . ..f. , . .
. 1 . me flclcnt. rnadequately n1anaged and often lov1-tcch
prO( uct1on structures to com ct" . .
. . . . P ltton from outstdc is leading to the restructurino and
<:: vcn 'cmtse of local production str . . . .. t>
a degradation >f I k. . . : ucturcs. gencrattng unemployment, and, in to
( \\Or mg <.:ondttJOns (Stiglitz 2002
Although some claim tint tl . ).
I 'J97 lfirst .
111
<J Til t (. lis process of globalisation is not really new (Williatnson
4 ompson J 'J99 ), the ir . . . .. . . . .
t!conomies nver recent decadt s .. l<.:rcas: tn the level of tntcractton among natrona)
cttnnot be tgnorcd. Since the late 1980s, trade has

INTRODUC TION : LOCAL AND
REGIONAL DEVELOPMENT
expanded significantly and tottl .
11
. .
. . ' wot < fon.!tgn dire t . .
l1vdold ( 1 ntcrnat ional M .. c mvestment (FDI) flows have
. onctary lund (lMF)
2
opened the1r borders, switching from . \ . . . 000). Many countries have
. \::1\ \er dtrtg,L\' te - state d' . . .
1\lllg systems. tmport substitution in l t I . " trcctec. economlc plan-
. 'us tta tsatJCm or cent .. l1 , l
varymg <.kgrccs of I ihcral free-mark t . '
1
a ) P an ned economies to
. . c Slt llC\urcs. r he I ibc . r .. . f .
om tcs has ott en been accompm ic<.l by . . . ra tsatton o nat tOnal
. . . ' macrol:conom1c: stabil ity p k . . "
curbtng 1 n flat tOn. reducing fiscal deficit . . d d b ac "gcs tocused upon
. s an c t, and low inte , t t
long-tcrn1 mvcstmcnt. ra es to encourage
1 he opening of national <.:<.:onomies is in t . h
1 . . . une Wit a argc body of in cco-
cchotng theoncs of c.:ompar t' d . .
. . a IVc a \ antage d1scussed m Chapter 3
wh1ch both frotn a theoretical and an empirical persp t h d '
. , ec 1\C as un erl1ncd the economic
benefits of open cconom1cs. 1 he works or Grossman and Hclpman ( 1 CJCJI ). Coc and
Helpman ( 1995 ). frankel and Romer (1999) and Fischer (2003) l h
. 11avc cmp astsed the
capacity of open economics to benefit from trade. capital mobility. technological
and ?f t<.;chnology. The restructuring and productivity effects of lib-
craltsatron and regtonal tntcgration have also been highlighted (e.g. Kang and Johansson
2000). Empirically-based rcl)carch has tended to confinn the supposedly superior eco-
notnic pcrfonnance of open economics. Sachs and \Varner ( 1995. 1997 ). Coc eta/. ( 1997)
and rischer (2003) dcternline the ex istcncc of a strong positive relationship between the
degree of openness of a country and it<) economic growth, as a result of their capacity
to reap the benefits from an increased mobility of capital and technology. Others, led by
Rodrik (2000), Stiglitz (2002) or \Vade (2004 ), have. in contrast. questioned the
ficial effects of trade and the opening of for economic growth with evidence
of the evolution of social and regional dt<:,pantics and inequalities. talk of
globalisation should not lead us to forget the enduring importance of the nation state
as a regulator of econon1ic activity. including at the local and regional level.
The con1bination of econon1ic liberalisation with macroeconomic stability packages
has had sotne positi\ e The most spectacular effect has been the reducti?n
inflation from double or triple digit figures to single digit figures in most m
the world ( Kroszner 2003 ). There has been a rapid expansion in capital flows to more
open countries. export growth has abo flouri shed and economic grov ..:th has tended to
R d R 1995 Qumn and Woolley
becon1c less volatile than in the 1980s ( amey an ame) . . . 'l . I l ,
?OQ I) On the negative side, 1ibera1isation has not been accompanted (wtth .r\,; atlt\dC.)
- . h . been pivotal such as Chma. n ta.
fe\V exceptiOnS \Vhere national state tntervcntlOtlS a.\ e b ' h. } p\oymcnt
. d I o t high cconomtc growth or ) lg 1 em
or Ireland) by sustatnc one- crm ld t growth has been lowt:r even
b f
. ntrics around the wor recen
<JrO\vth. In a nutn er o cou . . l"beralisltton and macro-
t> . d f tl 1980s In addttton, cconomtc ' ' .
than 1 n the lost dec a c
0
lC .
1
'T'"' -
1
effect' of 1995 in \ tc' \CO.
. . . . . e not without nsk. T 1e t:qut a
cconomtc stabJltty measUJ es ar . . . h hlinht the macroccononuc
. . 997 tl ?002 Argcnttne cnsts tg o .
the Asian cnsts of l or
1
e - t . cutTcncies pcrl'Ct\ cd as
. h ... fiscal managemen or . 'd
vulnerability of countnes w osc '": ft unable to cope "tth f<lP1
. . . d hose industncs were o en . i.. "1
weak by external mvcstOJ s an \\ . . . I . h . technology goods trom c \,;\ L -
. . f: mpctitton from ctthct 1tg et .
rcstructunng and/01 to ,lce co .
1
d --veloping economtcs. .
h oducts from ot ler c . 1 "' ot
OJJed countnes or c caper pr ' . . .
1
be contributllH! to t 1c uKtt:<l'-\,;
. deregulatiOn may a so . r. 'i tl ,r
G lobalisation and . . , of the countries that have ltbcra l'-Ll I
social and territorial incqualtttcs wttlun man)
I
I TRODUCTtON
Plate 1.1 Globalisation and the rise of East Asia: the Singapore waterfront
Source: Photograph by Dav1d Charles
INTRODUC, fi ON lOCAL AND REGIONAL DEVELOPMENT
cconnm ies (Wade 2 004) horn a soc ia I perspect i vc. there is substantia I C\ idcncc of
i IH.:reast.n g '"e i a I i ncq ual it Y in g to the exclusion of particular socia I groups and/or
places I rom 111<11 pmspcn t Y and well-hei n g (Dowling 1999). 1 ncreascs in produc-
tl v tt y and growth - whcnc\ er and wherever they happen are more related than ever
to technological progrc"' l he mtroduction of new production plants or of new agri-
cultural methods of production i'> generating greater productivity and efficiency. but
frequently at the or employment. Thi s frequently jobless economic growth is
contributing to the exclusion of large number' of uno;killcd workcro; and to the expan-
sion of the informal economy, both in the
4
dcvdoped' and in the 'developing \\'orlds
(Schneider and Enste 2000). a consequence, the economy that seems to bc emerging
from the process of globali"iation is by greater social and often geograph-
ical polarisation. The divide between the highly educated and stable wage earners and
an increasing group of precarious workers and workers in the informal economy seems
to be growing at a greater pace than ever (Esping-Anderscn 1999).
From a territorial point of vtcw, only a limited number of localtties and regi ons seem
to be reaping the benefits from the new opportunities provided by the process of glob-
alisation. r n general, regions tend to be tho':>e that ha\ c something distinctive
to offer to markets that expand beyond the traditional realm of the local and regional
spheres. The 'winning' regions can be divided mto three categories:


Large metropolitan regions: Large urban in both the
the "developing' worlds arc where many of the high value-added scrvtce acttvJttcs
arc concentrated. flnanciaL real estate and insurance services arc clus-
tering more than ever in large urban regions. a5 are the of corpora-
tions (Taylor and Walker 2001 ). The economics of denvcd from such
concentration of production arc leading to the of re.search and
development and design to global metropolises .of
d S 2003) FDI is also flocking to large metropohtan areas.
an torper . . . ,.. .ivl , c t and 1ts
. I i l and economic dtspanttes. For cxampk, 1 ext co 1 y .
subnat10na soc a f
11
FDI in iv1cxico ivtadnd
urrounding state have received more than 60 per cent 0 a . ' , , .
s . f alJ FDI flowing into Spam. Howe\cr. dS
has attracted more than 70 pel cent o b . docs not mean that all its
1
. h d , mism of Iaroe ur an areas
mentioned car Jer. t c yna :orit of the large urban agglomerations
inhabitants have benefited equall y. A m J yf
1
,
1
cconom)'. in which wealth
. fi the emergence o a cua .
around the globe su er rom . . . d social deprivation. a growmg
and hi gh productivity jobs coexist wtth. I C. anthe service sector (Buck et a/.
d I , aid precanous JO s m
informal sector, an O\\ P
2002: Ham nett 2003 ). d of territories that to be
. I . s The secon group h
Intermediate industna regton . ':" c: tors around the world are t e
bTt, of producttOn 1ac
Profi ti ng from the greater mo I J ) f fter1 combines labour cost ad van-
. Tl type o area o
intermediate regwns. lts. . 't I and accessibility ad' antages
s With human capt a . 1
tagcs with respect to core area . , } attractive locations for new me us-
with respect to peripheral areas. makmg t 1.cm, ( . the United States and Canada
t tc and provmccs
10
1 f the
trial investment. rvtountam s a s ft g the old industrial rustbe ts 0
. 1 .. ccm . . .
1 arc attracting large mdustna Jl1\ c. . . Numerous intt:011edwte butopcm
. f '\Iorth Amenca.
East em and Great Lake at cas o .
,
- - .
\ TI\ODL CliOt\

tl
1
, d '\ Jopinu '' orld that have n1anagcd
. .. \ ) l v m - . .
[of , ,.r ,t egW'
1
' mt t ::::- ...I , , J ' '-m
1
Jtn\ art; the art;ns. Places l1 ke
. h, 111 l o '- .
w rin l thctr n1.1r niL : :::-I ,
1 1
c thri\ ed thanks to their capacity to
.. \ 1" "' or 8Jlr Ill rlll0!l .:-- , . .
l.mcun rn '
1 0
. .
1
. . , t'\ .. r the "orld. Others. '' 1thout rcachtng a
, 1 o , number ot wur: .t I am dll . .
.mra t .u-=-'" ,. I h althv dnd relath cl) succe sful tounst tndustry.
t\?S hJ\ l'U t up a .
- . n .
1
oi'-)b 1! -. ,J world tend to be the exceptions rather
Htm '\ r. the dynami .. ai "J" l =- ... I. . .
I tt
. .. n m not .. ,. ,,.
10
n-. .1nd locahne to adapt thetr economic
than the rule. \ o ... n
1
.cz- . . . . . .
. t )n ' : 1ob1J1, ltlOn ha- made econon1tc actt vtty relatively
t:lbn\.' to the "'m 'rgcn con\JJ '- " '-Jl _ .. . . . .
b
.
1
tl .... ' th ... 1bi1itv to in\ est globally has hetghtened sensJhvtty
more mo 1 .: or ( 1..
1
.... .
to local and regional dit1crcnce ( l 097). The competlt1ve advantage that certam
temwri "s cd in the pJst a: J rc uh of their unique conditions or their proximity
10
nl\\ le s Important. Jmpro\ ernents in infonnation technol ogy
Jfl' cvtltriburing to tntiu trial and agricultural production. A lo\ver degree
...,
of on i- occumng in t.)ften due to their need for face-to-face inter-
--
and tmt. ahhou:!h the fate of market .. -en ices is often linked to the dynamism
-
of e"'onomi.: acivity in other .. \ s J con equence. traditional industrial regions.
agncultural area - and region. \\ ithout J dear cornparatiYe adYantage are finding it diffi -
ult to capture ne\\ marker.- and their are often losing share in their O\\ n
lmditiona1 markets as are. ult of the opening of national economies to competition. Basic
and ma production indu trial companic that had survi\ed and often thri\ed in condi-
tion of monopol) or oligopoly under fragmented national markets arc in many cases
crumblmg under the market integrati on and of con1petition. Traditi onal agri-
LUituraJ ba'.,. ee th k d
. "" n etr mar ets tn\ a ed b) cheaper agricultural produce from
more tcchnoJoe-tcalh ad\ an , "d . d . . .
.... . an areas \\ tth a strong agncultural potentt al
ha\e to deal "ith an imperii d
1

cct an re ati \ d) closed world food market (Henson and
Loader 200 I).
The out ome of recent econ
01
. .
r' h ntc 1 greater econornic and social polari;:)a-
IOn at 1 e world I eve 1 ( Rodri ou,. . p . .
, . , . . . e t: Z- and Gill 2004). \\' hereas sotne national
economk. ULh as tho -e m South E -\ . .
'' ith accompan\ ina _ .
1
d . . sta, Chma or Ireland haYe prospered. albeit
. e an temtonal t I' .
old indu rriaf and relat .,..
1 1
. .nequa lhes. under the new conditions. many
l \ t: agemg areas m th ... d . 1
African 1\ tiddl E ... " .... . t: e\ e oped world haYe truggled, \Vhtle
c a tern and Central -\
ingJy derached from world . . . stan economtes are becoming increas-
economc ctrcutts a d .
in nun1erous count . ,. . h . _ ross omest1c product (GOP) per capita
ncs as starrnat "d . ll .
Sachs r 998). o t; espec1a Y m the 1980s (Bloom and
INTHO!HJCfiON: LOCAL
The world's economic polarisati< n ..
1
.
Ar I D R ( C I 0 II A l rJ f I E I 0 p M EN T
\. !f
.. '
> IS )Ctllg ltprodt . 'U . h' .
r0gtnnal capact tt cs to adapt to the new . , . Wit In ccnmtncs t)tffcrent
. . . cconomtc (...Ontcxt . . I (l
tratton of activity and wealth i . . . are ca tng to a greater (.;(>nccn-
. . n l cw regt<>ns 1 n .
t.'LOIH>tnl c dt vcrgcncc wtthi n countries A . . < country <Lnd to
. . . . . s d n.:sult. tntcrnal e . . , . h
growlll g Ill ht gh, l ow and tniddlc-in , .. . . tm alanccs are
. . . come countncs. l'ahlc; 1 1 . . .
the evoluti on of rcgtonal disparities tl .. .. . presents one measure of
Ill 1ts case, the vanancc of th . . I l .
or regional GOP per capita in 'lc ) .,1' ' (.; IMtura oganthm
u vc opcu and dcvclop1 1 f
worl d bet ween 1980 and 2000 or th .
1
, , . .. . . ng countncs o the
, . , . . . . . c atcst year Wt th avatlablc regional information
Several features need to be l11ghhghtcd from the tabl F. . h . .
. . . . . e I r5t. t c d t ffcrence m the <.hmen-
s ton of mtcmal dtspanttes between 'developedt and 'd .
1
: .
. . . . C'vC opmg countncs. In 20CJ()
tntemal economtc m Bns;tl. China lndi- or M . .
. . ' <1 eXlCO. were tWICe the of
tntcrnal dlspanttcs m Spatn and three ttmc: s those in Frar
1
ce th u is
. . . or c: m te( tates. d.
all countnes tncluded m the sample except Bra;i ha'lb seen t 1
. . "\.. . m ema econom1c Imbal-
ances stncc 1980. However. whereas greater economic polarisation took place in
the Untted States, France and (Jermany in the the greatest increase in economic
imbalances in the lo\ver income countries has taker place during the Between
1990 and 2000, the \ ariance of the log of regiona CIOP per capita has grown by 1.2
per cent in Brazil . 3 per cent in Italy, 11.6 per cent in Spain. 13.6 per cent in Mexico,
almost 17 per cent in India and 20 per cent in China.
This internal polarisati on has often coincided with the opening of national economies.
\Vhercas in Mexico the 1970s and early 1980s had been characterised by a reduction of
internal economic disparities, the opening of the countryrs borders to trade from 1985
onwards, reinforced by the American Free Trade Agreement (NAFTA) after 1994,
Table 1.1 Variance of the log of regional GOP per capita. 1980-2000
Year % Change
1980 1990 2000 1980-1990 1990-2000 1980-2000
'Developing' countries
China 0.578 0.483 0.581 -16.31 20.20 0.60
India 0 .352 0.377 0.441 7.10 16.98 25.28
0.388 0.383 0.435 -1.29 13.58 12.11
Mexico
0.588 0.488 0.494 -17.01 1.23 -15.99
Brazil
'Developed' countries
11.76 -2.63 8.82
0.152 0.148
Untted States 0.136
-1.06
1.09
0.188 0.186 2.17
0.184 Germany
1.51
2.97 4.53
0.265 0.269 0.277
Italy
7.25
0.222 -386
11.56
0 .207 0.199
Spain
8.36
0.163
8.67
-0.29
0.151 0.164
France
1.37 0.16
1.21
0.156 0.158
0.158
Greece
1.85
Portugal
0.231
0.236
11.24
0.275
European Union
0.247
Source: Rodriguez-Pose and Gill (200
4
:
2098
)
1982
_
1999
All others as shOwn. Reg ona
ce
19
81-1999; France
Notes: Data for Europe: EU 198D-1999: Gree
data from EUROSTAT and national statistical offices.
........__ ----

tNTRODL C ION
' t i 1 i\k\ico ( 'it) and the stnks
. )f t'l'l)fll)t1lll' <1Cll\ 1 ) I
I
, 1
1
.
111
L'()tll't't1tratwn l h ,
1
-Rc,ua und Rodngm .. '/ Posl!
1
002)
Ll 0 . ' LJ . d "" t.ttt'S t.:
1
)n, the b('rdcr '' tth thl: Hilt . .
1
J . trttll'S 111 Bnt/tl h.as Cl)lfll'akd '' tth the
a l . , .. 1 n .. '!.!ll)tlcl utsp.
... . tl:lrh the tn tlllt r n,t ... . . 1(', the Cdt h 1990" ( \, lnnt l ). I he
... HH . . "(.'l)Jl{)ll1\ '-ll L
c opcntng of the l'l1llllll\ 'L l lllt'(lUdht\ and urc,ltel (;()f1CCtHratton
:::: . . . ... l tnd tern tOr t.l ., ..
t' r" l'-tnl, 'oct.t < 1 t' t) 'rtJ1hcr d tr ''l tl
1mbtnJttOn o llll tc :::: , r c.wns ..H1l '' t:\\ t t: ' t:. s 1at
Ll "'. HCll\ It\ lt1 tOl '- ... .
"
1
f \<.1luc-addcd tconotntL
1
,
1
.,. '()
110111
, ts k.l, mg tHllncrous and n1an)
... I ' . h ' Ill ,\ <' l () h a IS ( L .. . ,
ha' found a tn,lrr-.d ntc t :;, I he chal knge o1 local
f th, \H)tld 111 .l \d) l
of th" arc.b o t h . , l ,d \ll1t't' the
i l 11 'nt ha" " ,u Pl
1
l:
and L C\ c opl
...
Territorial competition
I
.
11
... t {() attrKt and retain tnobi lc capital and labour
h
" ' t t of oloh.tft:::-,ltlOll. t lOI \,;" c.
In t t lOn -=
1
,
1
, .....
1110
arc nO\\ in dtrcct con1pet1tton wtth each
h " led tO '-ll"!!CSttOib th.lt OlJ. rt.t.: ' - .
.:L ::_- . h .. tor Lllcompctition ha .. focu cd attentton on the conlpet-
h.:OI h ... - . . .
. .
1
d .... ,. , 1 .. onorn
1
c-. as m ..tttutwns try to ptO\ tde the condtttons
ot JoC.l an I cll)n,l \.\. , .
. , d .. b,...J
11
, .. ,
1111
cnt. ( 1995) has quest toned the value of the
that "til attract an t.:m I .... . . . ,
. .. n . ,I::Hton
10
n ttional cconomtes. labelling tt a dangerous obscs-
tdca of compctltl\ 1 It; I. ' . .
Lf ... the
1
t j, u,cd to C\plain national econon11c performance, argumg
10n . r l' ..
that tt rcb on an inappropriate analog) bet\\ecn the finn and the nation because, unlike
finn. countrie' do not go out ofbu"ine (Krugman 1995: 3 1).
refute the tdea that countries arc in competition with each other, arguing
..
that dome:-\tic Ji, tandarJs .ue dctem1incd by itnprove1nents in domestic produc-
-
ti' ity. compettti\enc .on the other hand. is merely au eful political metaphor which
h..\ policy choices uch as supporting particular economic
ector (Krugman 1995. 1996). Kntgman ( 1994) acknowledges, however. that the idea
of regtonal competitivene . may make more sense than nationa 1 compctiti\ cncss'
becau c regional are more open to trade than national economies and factors
of production mO\c more ea ily in and out of a region than a national econOtny. Thus.
the notion of territorial competition ma1 ha\ e some utility when applied to the local or
len?l. Camagni (2002) ha argued that regions can effectively go out of busi-
nc s. msofar a they arc affected b) out-migration and abandonment. ln pol icy terms
as .pat1 of nation states. localities and regions do not have access to the range of
pol1cv mstruments uch as c . d
1
. . .
. . urrcnc1 e\ a uatlons, whtch nat1onal governn1ents have
used tradtttonallv in order to ha ,
1
.
1
. f . . . . . .
pc e\ c s o cconomtc act tvtty. Localtttes and reg tons.
then. must compete on the b . . . f I I .
. . a!)ts o oca or rcg10nal competitive advantage in order to
aurae[ mobile tn\estment. Camagni maintains:
\\'hat really counts nowadays .
<J . are t\\ o orders of factors and process: in an aggrc-
oate. macroeconomtc approach i . .
opmcnt ncrca mg returns lmked to cumulative devel-
proces cs and the agglom t' f . . .
microtcrritorial ap .
1
h ton acttvttles; in a microeconon1ic and
proac l. t e spectfic , d ,
single firms tCJTt.to
1
. . a \antages strategically created by the
. na syncrutcs and _ . . .
unaginativc and pro' t. . o. co operation capabtllty enhanced by an
ac tve publtc ad . . . . ..
tntnt strat10n, extcmahttes provided by local
IN r RODUC liON l OCA
. L AND RfGIONAL DEVELOPMENT
and national govl!rnm"l'ts .,
11 1
tl .
'-' I > ( spc<.: r
culture. . I l<.:lltcs htstorically huilt by a territorial
(Camagni 2002 2405 ..
ongmal emphases)
Thl! itnplication of Carnagni's argum,
1
..
1
.
. . . en ts l1at localttil;s a d . .
tht: held o1 ten1tonal compl!tition N, l n rcgtons can and must enter
much of th ,
compet1t1on assume\ that \uch stntcg,. c "'nt10g about territorial
. - ' 'tcs arc wasteful (sec L ,. . d
a account). ,
1
A b' ogan an Mo1otch 1977, for
. .... lint r 1x (2001) 'd
waste' in the form of the bidd , , .. b.. . . provt c an example of pure
. tng \\at ctwccn Bra?.lltan st t . .
embcddmg new investments in the <.:ar ind t . h a ec; anncd at atlra<.:tmg and
found themscl ves caught up in the stru
1
ry
10
t c .
199
0s. They show how all states
gg e to attract mvestmcnt ju t' f
of regenerating local and regional l!conomic" . d . s
1
ymg tt as means
-> an gcncrat10g employ c t s
frequently exaggerated the alleged benefits of . . m n tatcs
, . . . . 10\ estments to the provision of
ever larger financtal mcentt\ c<; toT 1 'Cs even at tl k f b k
. . . '
1
c ns
0
an rupt10g thctr treasuries.
As a t csult, such con1petttton was undermining the potent.tal 1 t b r.
, . ' ong- crm cnc,tts of FDI.
Rodnguei.-Posc and Arbtx (200 1: J 50) conclude that The b'dd'
1 mg '' ar'l, presented by
state governments as their main - and almost on!)' - development t t
. s ra cgy. arc a pure
V\ aste stncc they do not lead to a significant increase m welfare at the local. or the
national level'.
ln the contemporary period. territorial competition involves not just efforts to attract
manufacturing finns but also acti\ itics "hich will generate consumption. This form of
tenitorial competition is often pursued by large cities and metropolitan regions. A good
example of this type of acti\ ity is the competition for international sporting event!> such
as the Olyn1pics, or the award of 'Capital of Culture status to 10 the European
Uni on (Owen 2002; Sho\al 2002: Garcta 2004). Such competition occurs especially
bet\veen world cities aimed at enhancmg their global status in an era of growing inter-
urban competition to finance large-scale planned construction projects in those cities.
According to Cheshire and Gordon ( 1998). the incentive to engage in this type of
territorial competition is strongest tn the economically stronger. leading metropolitan
regions and it frequently works against \\ ider spattal equity. This points to the need for
effective regulation of competition bet\\ cen local itics and regions at the national. or even
supranational le\'el. Reese ( 1992). using evidence from \orth Amen ca. sugge:,ts that
appropriate forms of regulation can generate positi\ e policies. He th.c more
innovati ve approach to attracting mobile itn estment pursued in Ontano. we
di scuss in more detail in Chapter 7. where there arc federal limitations on financtalmccn-
ti vcs, with US cities where there arc not. . . .
1
It is probably necessary to distinguish. then. bet\\ cen different types of tcrrttor":
. . . .
1
tl teful "hile may have post-
compet ttJOn recoan1stng that some arc m 1crcn Y \\as . .
. . t o(R e 1992 Cheshire and Gordon 1998: Camagnt 2002;
t1ve sum c 1ec s ce , "'l oad"
. . .. n in Chapter 2. \ 1alccki contrasb 'tmltattvc O\\ -r ,
2004 ). Echomg our dtscussto . . , ?
004
.
1103
). The Brazilian
policies with "'hi gh road''. knO\\ ledge-based pollctes (- . B t ther forms of local
fi
1 t the fonncr cateaor; u
0
described above would fall m
1
Y
10 0
. e broadh -b
1
scd of
. . t' aimed at gencratmg more . <.
and regional pohcy tnterven wn 'd .
1
al or embcdd111g external
h
. h t orks that un erptn oc . o . ....
growth or en ancmg t e nc \\ . . cturns
1
rc tt the vcrv base
finns in local netvlorks to exploit spillo\ crs and tncrcastng r . ' < ,
' 12 .
- - . -
IN TRO 0 U C 0
Table 1.2 Territorially competitive policies:__ ____ _
enhancing
-
Zero sam -
Pure P OP"'otiort Fostering entrepreneurship
Caotunng mob le im'estment
Helpr1g new firms
Investment subsidies
Business advice
SL bsid sed premtses
\etwork enhancing
Internal net\\
External (non local)
Benchmar Ktng assessments
'tne and atr rretght ltnl<s
Scanntng for new
knowlecfge uncertainty reduction
coordir'lation
Infrastructure invest_m_e_n_t --------------
---------. (1998: 325): Malecki (2004: 113)
Sources: Adapted from C'1esh e an
. d
1
...
111
in tb ro ill' ... gcncrath e .. st:n e (Malecki 2004:
0
: ... , c opm\.. - . . . . .
T bl 1
..,
0
, des e'amrlc.., of territorial con1petttton pohc1cs. Chesh1re and
l i 1 ). a c . - pr
1
'
Gordon c,)ncludc:
The for local would to be: nurture the successful
firm already pre ent. G i \en the e\ tdcnce pre en ted as to \Yhy fim1s become
mobile. one of the ea t and mo"t cffccti\ c wa} s of doing this is likely to be
b) pursuing policie which en urea read) suppl) of reasonably cheap premi ses.
\\here polic) aim at mobile in\ e tmcnr. qualities-based (as distinct frotn
-trategie tnore to prO\ ide gains for local territorial agen-
ctc. of the they rcprc ent.
(Che :hire and Gordon 1998: 342)
.A ''e di -cu in Chapter 6. the intencntions of local and regional development insti-
tution thu ha\ e a critical role in the attraction and embedding of exooenous resources
::,uch a_ FDL occupational groups and other internationally mobile
,
The for development strategies for
oca 1 aes and regaons
\\'hat arc the options for the people fi . . . .
that art! strugo-Jino with th . and conlmunlttes tn the localities and regions
.... b e TIC\\ cconomtc st . '> n
the wcakne that
1
. . h
1
.uatton vv hat approaches can be taken to
tmn t e econom1c t
1
.
tones globally? People fi . . po ent1a of 1ndt\ iduals. firms and teni-
b
. m1s and soctettes tna . d .
ecomc more capable to . d ) nee to ra1se their awareness of and
respon to and perh
by the new econ . . aps, more ab1e to shape - the challenges
omtc condttton Vv'. 1 . .
st vc global ccono , .. . s. ' tt 1tn an Increasingly dominant and pcrva-
h 11 , tn) , an tncrcased . .
c a cnges necessaril)' d . . capclctty to respond and ad1ust to <rlobal
fr . . en owmg d , 'J o
actors that w1ll allow them to pl , h . . tn l\ lduals, fim1s and territories with the
J , acct ctrsklll d
Pace and to compete with others Al ,.. . s, pro ucts or services in the global market-
bulwarks ,. L tcrnatt\elv it m
agamst t11e harsh forces of gl b
1
.. ay mean constructing shelters and
fiJcuscd upo 1 r 1 a competition b c
n oca and regional needs d . . . Y
1
ormtng assets and resources
an asptrat 10ns.
IN1 RODUCl ION. lOCAL
REGIONAL DEVELOPMENT
is, howe\ cr, no sitnpk '\n \ .
. . ' ( untvcrsa\ way to t kl h
t)lobahsatton. No unique or untvcrs
1
t , ac c t c challenges posed by
.. . ,l s r,ltegy can be . r d
u less of the local context Past , . app tc to every area or region
hls she h '
of polictcs tn different c t, . h ' )wn t at the mere reproduction
. on cxts as more often th h .
unpact on the generation of sustainable
1

1
. an not ad httle or no
oca and rcgtonal de , 1
cn1ploytncnt ( Storper 1997 ). Traditional to -d . . 'e opmcnt and long-term
P own pohctcs atm d h.
de\ doprncnt have tended to be cut from th, , .
1
e at ac 1cvmg economic
c same c oth These have no , 11
of supply-led policies, focused either on infra t . . m"'a Y conststcd
. . . . s ructurc provtston or on the tt . . f
mdustncs and forctgn dtrcct invc\tment The \ 1 b h' d . a ract10n o
ogtc e m thts approach was that dcfec
tt vc accesstbdtty or the absence of finns that c ld . l -
. . . ou art1cu ate around them a dynamic
1ndustnal ttssue and generate technological transfc s ,. . h
. r was at t e root of the problems of
n1any laggtng areas.
Loca I and regional development and empiO)'tnent creat10 1 1 h
- n po tctes 1ave t us. untt \
been usually stntctured along two axes rhe first . f
. axt5 ''as m rastructural
cndo\vment. The supposedly high returns of infrastructural investment identified by
son1c (e.g. 1989) fuelled the belief that improving accessibility
\Vas the solut1on for laggtng areas. De\ elopment and employment pollcics were thus
articulated around the building of motorways. aqueducts. pipelines. telephone lines and
other investn1ents in infrastructure. Such investment has unfortunately not always
yielded the expected results. One of the most spectacular cases of failure of this sort of
top-down and supply-led approach has been the Italian \t1ezzogiorno. where. despite
tnore than forty years of strong infrastructure investment by the Italian state, the income
gap bet\\ een the North and the South of the countl) remains at the same level as before
the intervention started in the earl) post-war years (Trigilia 1992). On a wider scale,
sotne studies have also questioned the effccti\ eness of in\ estment in infrastructure as a
sustainable development strateg). Research b) Philippe ( 1999) and Yanhoudt
et al. (2000) at the European le\ el has un\ ciled or negative economic returns
frorn investn1ent in infrastructure.
The second axis was structured around top-down policies based on industrialisation.
The introduction or attraction of large firms to areas with a weak industrial fabric, in
combination with other development policies, has been in a fe'' cases - for example
in a host of South East Asian countries a key in the economic take-off of these areas
(Storpcr 1997) often in contc)>.ts of strong, state-led national deYclopmcnt strategy
' . . b l 1 . s ccessful and the failures
support. However, these pohctes have not een parttcu ar) u . . .
. h f the Italian iVlczzogtomo ts pcrtt-
outnumber the success stones. Once agam t e case o . .... . .. ....
nent. Inspired by the 'growth pole' theories of Pcrroux ( 1957) dtscusscd m "d
d 1970 . f shipyards refinenes. car plcmts an
the establ ishn1cnt during the 1960s an s .
0
k d s industrial fabric
chemica I pI ants in the South of Ita! Y with a rclatl\ c l) we a en ogenou.. (\ .. , t' JQOO)
. . . 1' . f the South of the country t - .
did not lead to the destred Jndustna tsatwn o h b . th . centive offered
l d f
tl Nort h to the Sout ) e m ....
Companies that \vere ure ronl lC . d
1
the industrial linkages and
. t f: ' led to create aroun t ,em
by the ltallan govemmen at . th atld ctn''lovmcnt
. . d t . nablc economtc gro'' t " ...
networks that could have deh vet c sus . .
1
, tt. os represented a barrier to th
nd
1
nstttuttOna se tno
ation. Inadequate local econonuc a l . ied hrac finn.'' hich ''as the
f 1
I ier , around t lC unpot ' :::- .
creation of net\vorks o loca supp :s
0
t of these larot' indu ..Jnal
main aim of the policy (Trigilia !992). As a consequence. m s "
- c 0
I
"'ironment - cathedral in the desen
,. d from thetr Joca e
oornote'es retna n d deta"- e re located here rather than locall}
1l d cu tomers "e
nm.c pnne1pal uppde an "' demJ of the oft n co tl} incentJ\ c pacl-
. l9 0) fi r b1e
: areas ( Ltpl-iZ - fum in the outh
1
lo s-making finn \\ere left
tba had I tl to tocauon of th
ag ed ball" to the orth
0
de in 1tu o- mo ... h a ...ea of the \\OrJd faJLd aJ o to deh\er the
. I . pohcte m ot er l
umlar rndusma lsauon ed -
0
fP.:d .,eloped cities and region in France
f rth firms Jocat
1
expected results \
0
'"
19
... J d \ eJopment pole theory, ha\ (; not triggered
fi Uo\\inP Pcrroux ( ' '
or patn .. agam
0
. ffect \. hich \\a uppo c-.d to be at the root of
d d mannc and JMO\ atJ e e
the e" . d do Roura 1994 J. imiJar results ha\ e been achJe\ ed in
rmble dp' elopmttll(Cua ra . . d
1
-
Slat . t' t oHo" d import ub utunon 1n ustna 1Sat1on poli-
a- Lam Amencan c.ountne;) na . .
mv...-. 9 0 th be(Jinnine of the 1990:). The protection of nattonaJ
n dti" m d-J => or e .., .
'" D1rn menc
0
c.onsumpuon and. to a lesser extent
tn mdcr to 1' us:. \,.UU ..,
"'""....... . nd 1 --A,. mdus n :) led to the creation of a relauvely large Jndu5-
a capta guvu;:, ... . . .
. n-!"b as .. xico Brazil Argenttna or Chde (see Hernandez Laos
base m countries
1
'
9 5
. Cano 1993 . Hov.e\er. he pre c-e of :apti e markets. direct state subsidies,
c
00
p:ID.ic procurernent. mo opo i!) JC and oligopolist1c practices and protectionism
mad most
0
t' the indusmaJ base of hese ciluntries inefficient relative to '' orld stan-
dards. ended up bf-anng mo t of the cost of ing higher prices for prod-
of. m lov. :r qual it} than those 3\ ailabJe in international markets (Love
Card.?OOS 1996J. The oprning o borders to competition in Latin America has
er.posed _ .:) af the industrial base of Latin American countries and led to
d.. .Glna ion ami los of numerous industria] jobs and
e) I 999: Oi I P 2lXJO J.
Th. are mu1t"p e and ariab f reasons for the failure of traditional local and regional
<!r! e mem polL- Sonte oft em are external to the design and implementation of
tm po ... In mf areas. ea' or d.efici .. nt education and skills among people and
oommu ... becam_ tne main barrier for suc.cessful development. Jn others
1
\veak local
4- ha\e jeopardised polic .. efforts towards development. Poorly suited
soetal an fJEtttutional <mtexts ha
1
be h' .
e a so en tghhghted as possible reasons for the
poor of traditional de\ e)
1999 y . opment poJtCICS orth ; Rodrigue/- .Jr.} e
J. e a:, tmponanr- if not mo e
related to tit elf . nnponant_- as the factors are the internal
among
1
...se
1
the .... . and mpJementauon of the development policies. First
1mbalanc of t ad.
J gic behind m t
1
, mo!) tr Jttonal development poJicies. The
. poL es v,"' to con,. nt ate h .
nnponan elopmfnt hot
1
. - r ... on \V at \vas perceJved to be the most

1
v, nh thr.o aim th' t h
tamabl ... d: v. ould r. Jl - a once t e problem was so1ved.
, - JO 0\lf for e I r
noct of an area
4
nt:Tcei .A xamp J the main development bottle-
,,.., eu to u;: poor ac. 'br
and C<Jmmunicauon .
1
<-esSt
1
heavy investment in transport
ure cou d 501\!e the , .b ..
qu-nce generate 'ntemaJ econ . . access1 thty problem and. a', a conse-
s
. UJnlc dynamsm , d b
m "flt u tamable de :lfinf'ne
1
,. an nng much needed fore1gn in ;est-
to J 1 ....,,. . n c-on .. c111 were n t h
' and regional de\e}onmpnt , h' .
0
at t e forefront r,f such apprr.,aches
S' 'I f' """' at t 1 tfmP
mt arly. the w of Joe I . d . ':
firrn u th f a tn u tnal tt ue . 1' b
J e ocaJny or region. . hrch C<)U u e addressed bf ludng large
technology tran ft'T5 and piJio cr .. d create dire-ct and indirect jobs, generate
an nggcr cnt .
reprcneurshtp. I io\vevcr, the impact
I' TROOUCTIO . LOChL A [) P.EG Qt A
E E OP /E'-
of the implementation of such development
1
.
po tc1es has generaH be d
due to thc1r unbalanced nature. in\ e .. . . ...en sappotn mg ...
.1 s,ment tn tnfrastrw:tu h 1
1
emphasis on other dc'Jelopment factor such as th.. re. v.
11
Jtt e or no
f J 1 h
.. . e support of local fh m . the imp ...
0
e-
ment o oca uman or the dtffusion a d -
1

. n ass1m1 at1on of technology h f1
created only mperfect acccssibilitv 10 martets \Vh
1 1 6
a
0
ten
"' ere oca nns. as a resul of th ir
relatt\e1) 1oY.er le\cls of competiti eness have st 1 d ...
. . rugg e to ga1n ground in out5 de
markets. more competttJ\ e external finns ha e benefited fi . .
. . . most rom greater accesstbtht;
to lagg1ng areas. ga1n1ng a greater share of those d d
. . an O"\ 1ng many local finns
out of bust ness as a result (see Ftgure 1 1) The frequent ret a d
1 nee on mv. ar ln\ estment
has equallv not dehvered the expected outcomes Instead of d"-' .... , h
. . . . .; ! a:amlSlng t eJr en\ IrOn-
ment: and mul11pher effects. large industrial complexes brought from other
locanons ha'e Jn man) cases only been lured incentives and subsidies and ha e
tended to foster a greater dependency on external economic actors (see Figure 1.1)
(RodrigL;.;;-?ose and Arbix 2001: 2000).
The second internal factor behind the failure of traditional de\elopment policies has
been the to replicate standardised policies in different areas of the \\Orld.
regardless of the local economic. sociaL political and institutional conditions. Policie:>
that \vere considered to have succeeded in a specific case have been transferred and
implemented almost v.rithout changes in different national. regional and Joca1 contexts.
ational planning and development often aided b: academics as \\ell as inter-
national organisations. were the main culprits behind the uni' ersalisation and roll-out
...

"

t

...




..

.
._&:
.J+:Y

...
_./
...
......
. ks of local and regional development strategies
-.. Figure 1.1 The bases and the rts
/. - ::iose (2002o: 11)
Source: Adapted from
INTRODUCTION _____
. . .. Yet -.;ocial and
i + .. tnd pr41Cl 1CC" ' ..
t
.
11
ft)J"''-dO'' n de' elopmcnt mot L ' 1 .(>tl'll ctn tncdtate thl' d fct
o .... uL . . . .. , I >c,d an(! rcgt ' . . .
. tt.tuttotnl Ill chttcrLnt t ..
1
-..c.., led to the tatlun: of poltctc' tiMt
' . .,. tnd tn Cc . .
. . .,.
1
... of de\ clopmcnt poltc tL" ' . . 1 , ...
11111
cc on top-do\\ n unpolled pol tctcs
tl\<.:1 , c I n addttJOn. tlc tL ' .
lnd JUO' cd ... ucccs"ful cbc\\ her J . 'U"" 111 Chapter 4, often h<td lrtt k ot no
' 1 ) ,, hrch. H!'- \H.' c
1
"c .
alienated the local popu att( n . . , . )J11tC , 1sion of thctr n ( v cuquc/
, . . 'I I' n the futut c ccont
-..J\ or participatton m but (
10
.::-
1999. ).
1
. ''-' together with the cha llcngcs generated
. . . I top-do'' n po Jete .
1 he t:1ilurc ot tradttrona . ,
1
, ino of local and regional development by
. . l I to a "cnou" t d un"' :::- . .
b\ cc It
111
,.c 1990 a scric of 1 bottom-up
..... . . . d , . a rc...,u . "' .
pracuuoncrs and aca etmc
1
. , htvc cn
1
ergcd (Stohr 1990: Amtn 2000).
. I de' dopmcnt po IL It:'- ' ....
local and rcgwna d , J , "'ntrali-,cd to a bottotn-up local and
... h v from top- own ,tnca L L .
Although the c an.=-e . h , 'th 'f ha-.. O\'Ct11tght. nor ts based on
, , I de' clopmcnt appr oac m: I L .
rq,wna fi "d
1
.. 'ttl"tl undcrpmmnc1. tnodel of ta1 Ior-n1ade approaches
a ')inglc or clear!\ de nt: t lcorc ' ::>
f t , has pronrc . ...,t\ ely been gammg ground as the founda-
to the de' dopmcnt o terri Oflt.:" ::
t: d ... , elopnlent tntel7ic:> (Vazque/ Barquero 2003 ).
tton ,or ne\\ .. o . .
f hat I
. loc,l and rcoional de\ elopment 1s at the heart of thts book
1 he questiOn o w "' o . .
and i-, addrc sed in Chapter 1. There arc man) compet1ng theones and n1odcls of local
and regional de,clopment that \\C rc\ ie\\ in Chapter 3. There are thus many defi ni tions
of local and regional de\ clopmcnt. Yet. the multitude of theoreti cal models and the
fac t that the main ourcc-., of for local and regional devc]optnent strategies
Jeammg from and imitation ha!) pre\ en ted the emergence of a widely
accepted defi nition. Therefore. local and regional developtnent strategies tend to resort
to outlming the ba tc feature!:) of the approach prior to specifying its particul ar content.
\Vhitc and (200 l) four feature. that characterise local and regional
de' clopment strategies: the) requi re partici pati on and social dialogue; they are based
on territory: the) entail the mobil i:sati on of local resources and con1petitive
and they arc locally O\\ ned and managed.
The main differences between local and regional development and traditional top-
down approach d T b
. es arc !:) ummanse 111 a Jc 1.3 and relate to fi ve domains. First, whereas
m traditional top-down appro chc th
1
.
. . a s c c ccJsJon on where to 1n1plemcnt dcveloptnent
strategtes 1s tvpicall v taken b , ,
1

1 . J ) na 10na central goYemment pl anners and developers
WJth little or no involvement f I . I . '
. . . , .
0
oca or reg10nal actors. local and regional development
prdctt ccs favour the promoti f d . I . . .
vel oped
1
. on C\ c opment tn all tCJTttones not just the underdc-
or aggml! - by mobil ising th
taoc of every loc--l't d . c cconomtc potenttal and the cotnpctiti ve advan-
c a t Y an reg tOn Th . , .
taken locall v or reo. II . . . c lnltlatJ" c for the deYelopment strategy IS then
J o
1
ona ) or With strong 1 1 d/ .
result of where and how th d . .. oca an or reg1onal support. Second, as a
c ecJslons arc taken t d' . l . .
all y designed. managed a d .
1
ra 1t1ona pohc1es have been gcner-
. n Imp cmcnted by t' , 1
agenctcs. The involvcm t f
1
na rona mmtstnes or central government
. en o ocal and region' I t .
t(ttJCm of local and reg ,
1
. 1 a ac ors tn the del ivery and implcmcn-
tona uevdopmcnt str t 1 . . .
degree of verti cal and hor. .
1
. . a cgtcs tmpltcs, 1n contrast. a 1nuch greater
r . . . llonta coordmatto f 11 . '
( JndiJon entails the synchr . . n a the actors Involved. Verti cal coor-
, . . . . . omsatton of local. re ,i . . . .
nat10nal tnstJtutJOns 1 tor. .
1
. g onal. national and supranati onal or 1 ntcr-
. . . tzonta courdmation . .
concerned w1th dcvc]opmcnt iss , (' f compnscs local publi c and pri vate actors
ucs a hie 1 3) Tl . . .

11
S con1plcx multJlcvel and multi-agent
I N 1 R 0 D U C T I 0 N : L 0 C J\ l A I'' D
i REGIONAL DEVELOPMENT
Tabl e 1 .3 Top-down and bottom-up local d
- - an regional development approache
rradtt/Onal development pollctes L
5
. oca/ and regiOnal development
1 Top down approach m wh1ch decis1ons
1
p -------
about the areas where mterventton IS romotlon development in all territones
needed arc taken in the nattonal centre With the tnltlattve often coming from below
2 Managed by the nat1onal central
admm1stration
3 Sectoral approach to development
4 Development of large industrial proJects,
that wtll foster other economic acttv1ty
5 Financial support, incentives and
subsldtes as the main factor of
attraction of economic act1v1ty
Source: Authors own elaboratton
? vert1ca1 cooperation between
different tiers of government and honzonta\
between public and pnvate
bOdieS
3 approach to development (locality
m111eu)
4
Use of the development potential of each
area, in order to st1mulate a progressive
adJUStment of the local economtc system to
the changing econom1c envtronment
5 Provts1on of key condtt1ons for the
development of econom1c activity
context of the government and governance of local and regional development is
discussed in Chapter 4.
- ._17 .
The third basic difference to the type of approach to development. Traditional
policies have typicalJ y focused upon the promotion of specific industrial sectors that
contribute to generate econon1ic dynatnistn. Local and regional development adopts a
territorial approach as a means of achieving ccon01nic development. The diagnosis of
the economic. social and institutional conditions of every territory and the identification
of local economic potential are the foundations upon which such development strate-
gies arc built. Closely linked to the sectoral approach of most traditional policies is the
development of large industrial projects that \Vere expected to promote additional
economic activity and generate the networks and value chains needed in order to achieve
sustainable development. The problems of this type of practice were mentioned earlier
and have changed the and led local and regional development to iden-
tify and use the economi c development potential of each area and to stunulate
1 d
1 conomic system to changmg
progressive adjustn1ent of the loca an regwna socto-e
economic conditions (Tabl e 1.3 ). . f
Finall y the top-down and bottom-up approaches arc also set apart by thctr way
0
. ' . . . . d \Vhile traditional approaches have
attracttng economiC actt vtty to locali tieS an reg10ns. . . . .
. . . t' ' . ckagcs and substdtes m ordet to
basically rei ied upon financ1al support. tnccn
1
' c pa .
1
. . . I I d . , ' . nal development tn general tenc s
att ract and tnaintain economtc actt vtty. oca an rcgJO. . .
1
_
. t, n the
1
mprovcmcnt of the bast<.: upp Y
to shun such incenti ve packages and conccntt a eo . . .
j
, .. t' n of fur
1
hcr economtc acttvlty.
side conditions for the development anc dttrac
10
. l
. , . ( 1999) loctl and regional development stl at gte.
Accordtng to Vazquez Barqucro . ll , h ' .. that covers the development of ceo-
, . II t tu d aroundathrectoc sc erne .
ate usua y s t uc 1 e , .
1
... t of hardware mV(l l ves nt<lll)
d . , ,are' 1 he devc opml:n .
notn1c hardware, e an ot g1l
1
. . . _ .
1
as the provi ion of baste
. d. . I development po ICICS, :s ue l
factors comn1on to tra tttona . t , no communication network .
. "' It, cludi.ng the cstabl ishrncnt of transpor a
1 n rastructure,
. ..
I HODUC II Of I I OCAI. ArJD RE: GIOI'Al DEVELOPMENT
li nall y, any local or rc!!ional development strt"gy ' tis> t
1
h \
" .... , . ( en a1 s w at , ;q .! :.1
llarq u<: ro ( I 'J'J'J l orgu
111
'' that is, the improvement ol the organisational and mstJ-
t
11
tiona I capac 1 t y to dcs1 gn. 1 mp lcmcnt and monitor the who Je de v<: lopment strategy.
The dcv<.:l nputcnt ol
01
X1t are goes beyond a mere vertical and honmntal coordination
0
r d i fiCrc n t I c vc Is of govcrnmcn t and or I ocal puhl ic and pri va tc actors and raises
important i of go a nee that to be addressed hy common institutions
( 2000; I lausw i rth c1 a/. 2003; l.ci bo\ it.-: 2003 ). The genesis of complex gover-
nance a<.,sodatcd with local and regional development initiatives often involve
new forms of cooperation and regional coordmation (Brenner 2003: 207 ). The devel-
opment of institution\ and governance systems also aspires to contrihutc to the cmpow-
enncnt of the population and to help individuals and communities take charge of their
o\vn future. Jt also fo<.,ters the development of civil society and promotes the formation
of the networks and partnerships that arc fundamental to processes of economic and
social progress. It has to be borne in mind however that. although the empowering of
local is a crucial clement in any lo<.:al and regional development strategy, it
cannot be con<., iuercd as ih only goal. Jt is a means to the end of attaining social , cco-
nomi<; und environmentally sustainahlc development and generating greater economic
dynami srn and ernpl oyrnent.
Overall , there arc numerous and economic advantages related to adoption
of local and regional dcvcloptncnt strategies in a globaliscd world in comparison to the
to tradi tional development programmes. 1 he social advantages may indude
the h>l l owing:


Local and regional devcloprncnt strategies empower local societies and genc:ate
lo<.;al dial ogue. People l iving in areas of the \Vorld that have had
1 Over the Cc()notnic activity taking place in thetr terntory, by usmg say or <.;ontro
lo<.;al and regional development strategies, start to develop a degree of autonom:'
anu adopt a rnore proacti vc stance concerning sustainable development and their
own economic, and poli ti<.;al futures. . .
1
. "(
, h l to m'tkc local and rcg10na tns I-
I oc tl and regional development strategies c,w c p , f' t} I ctl
' d f the development o tc 0 (
t utions rnon.: transparent and accountabk an os cr
ci vil sodety.
. . . . , , , tdvanta"cs of the approach are as. if not more,
t nHn an econon11c potnt of \h . .:\\, thl: ' b
i fi cant. and may j ncludc the foll owi ng:

. . bccwsc of their goal of
. . . ck\ dopmcnt ( . . .
Ll>cal and reg1onal c<.; onorntc . d , king any economtc actt\ tty

1
1 t tcrntory an met .
ern bedding e<.;oll olnlc act l VI y II ' . l't' )tl s md compnrat i VC Hlh an-
I . --c ifi<.; cconomtc con<. t H . ' . ,
located in it dependent on t l e spc . . . th md cmplt\ VIlll'nt 111
. , .. , . t i nablc economic gro\\ ' .
tages of that place, genctct lc sus a .
1
. J t d economic envtronnH.:' Ht.
. . d. ' . h ' lll ,res I 11 t H.: g o ,, . . I , , t
tnore capabl e of wtthstan tng <.; ' c- .. , , . , sa of t h(' tnvo ' \: lllt:n
. . . I , lopment stt ,t tcgtes. d . . .. l ,
L(Kal and regtonal < cVl: . . . . t' itv in a t l 'JTitUI). contll Hilt:
I
' . >l ing of L' COil OJll iC dl I\ .
of local stakeholders and t lc to< . . . .
. tl ' JlrtlltV of JObS.
I I. 1 n l l; t ' to a genera "' "'
-.J
0 0

s
0
c also disadvantages assocwtcd with
. . nd that there ar . . . . ..

1
ha to be bomc tn m h t thi .
1
pproach ts not w1thout J he
Howe\ cr. t olicics and t a :s ' . . ..
l
t d reoional development P . b extremely tune consun11ng. f he dcvcl-
oca an e . that 1t can e .
. d awback of th1s strategy Js ' h . coordination of local and rcgtonal stakc-
matn r . I alitions anu t t .
t of local and remona co . ritutional actors rcqutrcs an cnonnous
opmcn nd with other m .
h ld
ers amonv themselves a .d . , blc amount of ttmc and resources even
o :;, c a con.sl era
organisational cffon and consum .., . . be .started. And even when the key local and
t rocess proper can
before the dcvelopmcn P . , hen: is no guarantee of short-tem1 - or even
. . ar. cstabllshcu. t b . bl .d .
regional insutuoons t:
1
also the risk of not ctng a c to 1 entt fy,
_ success. T.1crc JS . .
medium and long-term , te development strategy. In a raptdly changtng
. I t the most appropna
design or tmp cmen . . , t
1
difficult task. The involvement of JocaJ and
I
t . t JS an acu e y
and comp ex con c>. d ,antagcs like the empowenncnt of Joc;aJ soci-
. offer numerou a ' '
rcg10nal ma} t bilit)' and ereater closeness to those who have to
. ter transparency accoun a '"'
eues. grca . .
1
, b efit more from the development process. Jt may also
contribute and wtll ultJmate ) en . . .
I
f in oeneral and local cconomtc Jn parttcuJar. to
encourage the local popu a JOn. o ' .
ta
0
their future and to take more nsks. However. the mere
take a more acttvc s nee t . .
. f 1 . 1 a is no ouarantee of the selectton of appropnate and techm-
mvolvcmcnt o oca u :s o . .
cal1y effective strategies for localities and regions. fn some 1t even m
the adoption of unbalanced development strategies. whose capac1ty to sttmulate mcdtum-
term sustainable development is questionable. Vested interest groups, publi c desire for
'miracle cures' and/or rapid results. often in combination with the presence of populist
politicians. may lead to the adoption of short-term. highly visible poJ icies and to the
neglect of more balanced strategies. whose long-term impact may have a less immediate
impact or appeal to large sections of the public.
The aims and structure of the book
This aims to provide a clear understanding and explanati on of contemporary local
and rt!!Hmal development It ft d. 1 r.
. ... ows 1rcct y 1rom the changed context of local and
regwnal development and th '"' 1 c
1
. .
. . . e scare 1 tOr a tcmattve development strategies for Jocalt-
tlcs and rcg1ons dis d b .
J
2
3
4
5
cussc a ovc. 1 he key quest tOns addressed are:
\\'hat are the principles and ,
1
.
1
d Vtt ues that shape definitions and of local and
fCgtOna evcJopment?
\Vhat arc the conceptual and the . , , .
interpreting focal a d . orett cal fr<tmeworks capable of undcrstandmg and
\Vh . rcgwnal development?
at are the mam mtcrvcmions and .
policy?
108
truments of local and regional development
1 fow do localiti es and .
regions attempt t ft1
And, in normative terms lh k'
0
c cct development in pract ice?
b
. .r. ' " at ' tnds of Jc c 1 . d
e pursumg! J a an rcgtonal development should we
r h
JS book LonJ/ n-..
1
d /J .
... , \e''Lona/ fJ 1
closely integrated part I .s p e (jpment
s. n art J' Chapter I
addresses its central questions in four
' Introduction: local and regional de vel-
ltiTRODUCTJO : LOCAL At'D
_ REGIO IAL DEVELOPME T
oprncnt' describes the changing context c f
1
,
1
.
h
, . . ..
1
, . . ) oca and regtOnal de\ elopment
Jt emp as1ses scvcra ovcrlapptng dtmensions th .
,
1
, . . . e growmg 1mportance of heightened
mternat1ona 1sat1on or globahsatton: mcreascd intc
1
, ..
. . . r- erntona. competHJon more soph' -
tJcatcd or knowledgc-tntcnstvc forms of cconom . . . '
15
. tc acttvlty; rap1d uncertain and
geographically uneven and unequal economic soci' 1
1
. , ' .
. ' a po tttca1, cultural and envJron-
rncntaJ change: multtlaycrcd and devolving systems of , . d
. . . go\! cmment an governance and
new tntcrvcnt1ons, mstrumcnts and policies Fach of these 1 '
' c emcnts arc urthcr elabo-
rated throughout the book. The remainder of the Intrnduct
10
n r . d h.
1 . . p o d (.;S t 1s rat1ona e and
context for the organ1sat1on and -;tructurc of the book.
Chapter 2 'What kind of local and regional development and for whom?' _exam-
ines of .to examine what is meant by local and regional develop-
ment: estabhshes 1ts htstoncal context and explains the central importance of the
geographical concepts of space: territory. place and scale. The chapter then discusses
locaJ and regional dC'<Ciopmcnf s different varieties, principles and values as well as the
socialJ y and gcographtcally uneven nature of who and where benefits and loses from
particular fonns of local and regional development.
Part II of the book - f-rameworks of understanding - examines the concepts and
theories of local and regional development and institutions of government and gover-
nance. Chapter 3 - and theories of local and regional development' - reviews
the main concepts and theories used to understand and explain local and regional devel-
opment. The approaches reviewed arc nco-classical; Keynesian; stages theory; product
and profit cycles; long \.vave theory; Marxism and the spatial division of labour; transi-
tion theori es; institutionalism and socio-economics; innovation, knowledge and learning;
endogenous growth theory; geographical economics: competitive advantage and clus-
ters; sustainable development; and post-developmcntalism. For each different school of
thought and type of approach, the discussion focuses upon: assumptions and conceptu-
ali sation; aims; constituent clements, including causal agents, relationships, mechanisms
and processes; linkages to policy and criticisms. .
Chapter 4 - fnstitutions: government and governance' - examines the changmg
nature of the state and its implicati ons for local and regional development. It assesses
<.:riti caJJy the transition from government to governance and the emergence of a
traJised era of devolution and new regionalism' wi thin the framework of multt1evel
, , t. , I to the neighbourhood. The rcta-
institutional structures rangmg from the suprarlcl rona
I I d
. 1
1
1 development are also add res cd.
tionships between democracy and oca an regtor a .
d
I' ' amines the practlCC Of local
Part Jf I - J ntcrvcntions: instruments an P
0
JCICS . . , d,.
1
. . 5 'Mobilising mchgenous potential ea 5>
and regional development pol 1cy. ( hapter -
11
.
. r r. ,. , . , n the indigcnou or natura y occur-
With the approach and tools a1mcd at captta Jstng upo c. . h' localitic and
. dfigcnous growth ,rom \\ Jt Jn
ring econotni c potential and promoting en ) d' Part 11 instruments
d
rr. t fi mcworks of understan mg JO
regions. Connecting to the J
1
crcn ra . , owing and
r n bl' J ing new busmcsses, gr
and pol icics arc addressed .or csta 1s,
. .
1
,
1
d upgrading labour.
exJsttng bustnesses and dcvc opmg ar , the approa(;h
. d b dd. ' exogenous resources rev
Chapter 6 A ttractmg an ctn c mg . b . investment and people for
. I . , d anchonng usmesses,
and policies aimed at tmp antmg an . . dd the changmg roles of trans-
Th d scusston a resses
local and regional development. c . k. the role of local and regional
(
. I b I productiOn networ s,
national corporations (TN ,s). go a
u; ___ c_.ll
INTRODUC 10 1\..
. J indie:enous the sCcllnng
. ... ......
11
,1nc ..... , ,
. t ,
11
't)nnccttons bd'' tt: ...
1 1
... ot dt'
tt h lltll H. " \. . d i ,.
1
Jjnn \\ tf 1 t lt C
i
.. ,t ' tHton t,f occupatWil!'- an c t:. ::
1
tt tnch of the boo"- c' rtttcalh
ant t t
1
pulls t lC , ...
Pan l \ _ approac lCS
1
' .
1
t , wd intcrnation.1ll) and tn
:- t' d ... , cloomcnt tn OL.1 t tt.: . , :- ...
t
o t: r t' l ..
1
1 md rcgtonal de' doptncnt. C haptcr
o t " t th, future o t)L, ... .
oncludc the h t)O"- and rctkct on t: . . . , ... dnn' s on the tnatn thetncs
L . I d... hpmcnt Ill pr ,u: ttc t: . .
-; _ and rcgtona t\ c l .
1
J , ...
1 111111
ctlt in a range of tntcrnattonal case
I nl lnd rc<-Twna oc' t: c t .
of the to as css OCt ' . c .. , . , i coping \\ ith cconon11c dec I inc
.
1
... , )rt .. c dtlt :::- . .
studtcs The c\.,nnp t: . ft' d.
1
tmcnt ( lalbco. k'tco: Ontano, Canada),
_ c
1
d) tn inll to cct a .I l . . ) .
('\\.1t1h Ea:-.t t:' . ,... t)n ( ilicon \ 'aile:. Cahfonna. U A. sccktng
. t' ll de' elopmcnt tr<lJt.C: L
an C\. ts
111
=- . . t '\.t of regional restructuring (Busan, South
. 1 d , "lopmcnt ll1 J c: on t ..... . .
rcgwna t:\t: . f)m, nwn ( C\ illc. pain) and dcaltng \\ tth the
. ) tin('r an economtc tran c '
K\.'lrca attemp :::- .
1
cnc of fonnatwn (1 reland). Analy is addre ses
ne' en local and con cqu t.: .
u .... .
1
in "Inch cJch c 'L' C ha, con, tructed concept and tratc-
thc common and pal1ICU ar \\a: -
. d 1 d clopmcnt thc1r in titutton of go\ cmmcnt and go' cmancc.
ot lol:al an regwna C\ .
:- . "' d achtc\ ement and 1" ue and futute challenges.
tntcn cnuon trategtt:. an .
Chapter conclu imr - initiall) summarises the themes of the book .. In a
t
. . e "nd ,n an ,, er to the que tion of what kmd of local and reg tonal
nonna n c t: "
economic de' clopment and for ''hom. it dnn\ upon the core book then1es to set out
our collecti,e , i ion of what holi tic. progrc, si\ e and sustainable local and regional
de' clopment might look like. Detailed practical initiatives are explained. The final
ection clo e the book by reflecting upon the limit and political rene\val of local and
regional de,elopment.
Further reading
For a ie\\ on the globa1i. ation ee Held. D., i\.lcGrew, A., Goldblatt, D. and
Perraton, J. ( 1999) Global Transformations: Politics, Economics and Culture. Cambridge:
Pohtv .

On the local and reoional de,elo

1
. .
G
.
1
h
1
Sl :r. o . pmcnt tmp lcattons of globalisation see Dicken P. (2003)
0
a lljt: Reslwpmg the Gl b 1 \ ' '
S ... p .
0
a .icononlic . lap m the 21st Centurv (4th cdn ). London:
age. crron . D. (2004) Glohali . I s . . .
Di\'ided World Lo d . R sat Lon cmc ocwl C lzange: People and Places in a
. . . n on. outledge.
For a dt. cu of the rclationshi betw .
economic growth. see Sach t
0
. cen .the degree of openness of a country and tts
proces. of global integration:
8
. tnd \\ a mer, A ( 1995) 'Economic reform and the
for a critical engagement with the on Economic Actil'ify 1: 1 95.
tions .. ec Stiglitz J (200?) G/ bg
0
1
. debate and the role of international institu-
F . .... ' ... o a 1:atw J
or a dlscusston of territori al . . n wu lis Dtscontents. New york: Norton.
l . . compctttton, sec M I k. E .. . . .
w la Jt means and 'Ahy it mea . . a ec
1
... (2004) Jockeymg for postt JOn:
R . I ns to regiOnal d . I
. egwna 38(9): 1101
11 20
. c\e opment policy when places con1pcte'.
Fo, the altcmatt\c and botto "
d m-up torms of I l
(l: .). ( 1990) Global Challenge and L . I Roca and regional development, sec Stohr, W. B.
tn ( um, 1 . oca espmne I .,
u
1
P
01
W_l Lurope. Londo . Tt . nt Lattves.for Economic Regeneration
Barqucro A (?()03 n. 11c Unttcd Nat' U .
.. . - )Endogenou\DJ tons nt verstty Mansell Vazquez
( llle\ Lo d d ( ' e opme111 V "1 . 1. ' '
n
11
an New York: Routledge. ' l Innovation, Institutions and
WHAT KIND OF LOCAL
AND REGIONAL
DEVELOPMENT AND
FOR WHOM?
Introduction
One of biggest n1yths is that in order to foliter econOinic de\ clopmcnt. a
con1muntty must accept grO\\ th. The truth t<:; that grO\\ th be distinguished
fron1 dcvclopn1cnt: growth tncans to get bigger. de\ elopment means to get
better an increase in quality and diversity.
(Local Government 2004)
The Local Govemn1ent Co1nrnission a local government association in the United
States has a particular view of the kind of local and regional de\ clopmcnt it deems
appropriate and val uable. Such perspectives n1ay differ from place to place and vary
over time. Ho\v specific interpretations arc determined and how the) di ffcr arc central
to understanding and questioning the nature of local and regional development. To
understand vYhat we are dealing \Vith when thinking," riting and doing local and regional
devclopn1ent \VC need to start with first principles. Our basic understandings of what
local and regional development is.\\ hat it is for and, in a norn1ati\ e what it should
be about n1ust be questioned. \Ve can begin by asking the fundamental questions of what
kind of local and regional developn1cnt and for \\horn? Starting here encourages us to
take a critical approach and 10 consider clo ely what we are learning and thinking
local and regional development. These basic concen1s arc addressed in the four .sect tons
of this chapter. First, questions of definition arc examined to understand what
by local and regional developtnent, to cstabli h its historical context and to und:rstand
f' place and scale. Second.
the tmportance of the geographical concepts o space. L:
1 d . 1 cnt ar .. explored to under-
the nature, character and fom1s of local and rcgtona C\ c OP
111
L:
. . d
1
... . d ffl""rcnt places and tunc pcnods.
stand its different varieties and pnnctples an ,.a ttL:s tn
1
L:
Third. the objects, subjects and social welfare dimensions arc
10
the often sociaiJy uneven and geographically di ffcrcntiatcd ot
. f 1 1 and reo tonal development. ast,
where benefits and loses fron1 particular torn
1
s
0
oca e . . " . rt . _
J ('I t 3 bui Ids upon the potnts a JC
a sun1mary and conclusions are
1
ap cr -d ,_ d . d
. . . ,. . . , . tl theories that seck to un crstan an
ulatcd 1n th1s chapter and dtscusses usc
111 1
e
explain local and regional development.
t TROOUCTIO
1 development?
What is local and regeona
.
1
. tand what i!' meant by lo al and
)Olllt to unc t: r='
Q
t
-
01
, of definition are a .r . exa tJv what is n1eant by local and
uc a k:fimng c .,
onal de,clopmcnt. Jlo"e'cr. c . ht b. c m1monly Dcfinttanns
reg ' . mple:\ than rnag .
egional de' c1opment 1. more co
1
d regional de' clopn1cnt 1s for and what
r of \\hat lot" an ..... . .
arc
bound up \\ilh conceptiOn . . c f<kveloprncnt'. Rtlytnond
. , to concepttorh >
it i to achJC\L'. Rt.: ernng . t'c u political and cconon11c ha' c
. , \difficult and conttn J l . . .
(19 3: 103)notcdthat \t:r. .
1
.. t , term:>. Dchntng - tndt\tdu-
- b h appan..:nt amp tct )
been ,,idcly ob:'!curcu Y t b
1
.
1
and n:oional dcvcloptnent is a critica11y
. I h t b meant v ot a :;, .
aU) or collectl\ e Y - \\ a k . f e are to look bcvond often
. d deceptively ta t \\ . . . .
Important an . . . In the cxistino literature. cconomtc dunenstons
. d upcrfictal rtpllOJL. "' e
a umpuon an . d ha\e hi ... toricallv been at the forefront of
uch a grO\\ th \\ calth cn:auon an J ... d T
' " 1 . .., 1 nd regional developrnent (Ann strong an aylor
dc:'!cribing what con-ututc:-. oca a ..., . .
.
1 1
, d oional development i"" equated wtth tht s narro\vcr focus
?000) omeume ' oca ctn
- d 1 omic de' elopment. For Storper ( 1 997 ). the local and
upon local an reg10na econ . . .
regional search for and well-being upon the sustamed _ncreases 1n
employment, income and productivity that remam at the heart of economJc develop-
ment. For Beer eta/. (2003: 5), there is a reasonable consensus about the broad para-
meters of \\hat i meant by local and regional economic development: it refers to a 5et
of activities aimed at improving the economic well-being of an area'. Such activities
may include economic development strategy, enterprise, labour market and
technology initiatives, political lobbying and so on.
This often dominant economic focu in local and regional development has broad-
ened since the mid-1990 in an attempt to address social, ecological, politi cal and
culturat concerns (Gcdde and 1 'ewman 1999). Reducing social inequality, promoting
cnv1ronmcntaJ su tainabillty. encouraging inclusive government and governance and
cultural have been incorporated to varying degrees within defini -
tions of local and regional development (Haughton and Counse11 2004 ). Moves towards
broader notions of ouality f l'[!
1
h .
. , o I c, socta co es1on and wcll-betng have been integrated,
somcttmes uncasilv with cont't d b
, n nue concerns a out econotnic competitiveness and
growth (Gcddc and Newman 1999 \1 2 )
tl . organ ( 04 ). We shall return to the question of
lc mtcgration, relati ve balancl: , d d' fD. , . . .
.
1
. . . . an
1
<.:rcnccs tn cmphas1s between the econom1c,
SOCia , ccnlogtcal. pohttcal and cultur I r .
below. a c tmcns10ns of local and regional development
Jn the context of a broader undcrst d' .
and extend how we think , b h an tng of mtcrrclatcd dimensions, we can deepen
a out ow to dcfl . l I
approach can open up spac. f . . me oca and regional development. Such an
. . . ' c or mnovattvc think , . b .
opmcnt 1s m the present \Vh . ang" out what local and regtonal devcl-
. . . ttl It can or could b, . . . .
And, c1 LH.:tally, what it shoull l c - m tcnns of v1s1ons tor the future.
t )e - 'n the n .
v;t!LH:-basud judgements ab( ut . . . ormattvc st.: nsc of people in places tnaking
, Pllonttcs and wh h
oprncnt) for their loc'tlities md . '
11
t cy consider to be appropriate ' de vei-
l
. ' . c regtons There . .
lJJI<. erst;md111g of dcvclopme
1
f . . IS
110
smgularly agreed homogenous
' J I no or for locll iti t . '
c !.!ve oprncnr ' are socially <.J-.t ( cs an<. regtons. Particular notions of
c cnnllled by partie l . . .
u ttr soctal groups and/or interests an
K I N D 0 F L 0 CAL AND REG I 0 N A L 0 EVE L 0 p M EN T?
specific and titnc periods. What constit t . 'I .
1
... .
. u es oca and reg tonal development
both wtthtn and between countries (Reese 19
97
. [)
. . . r anson e1 a/. JQOO) ln any
snctcty. the 10r and articulations of 'loc 1 d -
. a an regtonal development' are fluid
and dynan11c (Beer et a/. 2003 ). They arc subiect t h .
. J
0
c ange over umc. Precedents
cxtsttng practtce and norms arc subject to incremental and _ . '
. . radtcal changes
_ for cxan1ple tn response to the kmds of external shocks
0
tl . d Ch ":"
. . u me m apter l, mcludm1!
currency collapses. poht1cal sea changes or environmental cata t h Th ._.
s rop cs. e assessment
of outcome<-. and performance can trigger reflection and change 0 b t d tb
. e a e. c 1 cratton
and discus5ion can the doing and practi5ing of local and regional devel-
opment. Model: can .be Imposed and resisted. Political cycles and government agendas
can recast publJc pohcy for local and regional development. 0 15sent. struggle and inno-
vation can bring fonnerly alternative approaches from the margin into the mainstream
and v icc versa. Local and regional interests do not just define local and regional de\ el-
opment in a vacuum. however. At least some consensus exists around common themes
'
principles and values introduced in Chapter 1 -to which we will return below. Given
this potential for geographical diversity and change over time, reviewing the evolution
of definitions of local and regional development can anchor its main thctncs and
dimensions in their historical context.
Definitions of local and regional development:
a brief historical context
Given that the definitions and conceptualisations of local and regional development are
differentiated geographical1y and change over time. the historical context and trajectory
of their evolution is central to their Dating back only 250 years to the
late eighteenth century, the notion of de\ elopmenf as increases in income
per capi ta is a relatively recent phenomenon in hun1an history (Cypher 2004).
Fron1 the nineteenth century, the ascendancy of capitalism as a form of soctal
isation brought technological change, productivity and the dominance of mdus-
trial employment not\vithstanding the system s periodic crises and slurnps
J 982 Barratt 1995). From this era, development was focused upon
' h. h 1 lad penetrated the economtc and
dimensions and the relative extent to w JC caplta tstn
1
. .
. d t. 1odernising and replacmg pre-capt-
social structures of localities. reg1ons an na tons. n . . . , .
. . Industrial RevolutiOn latd tht.: toun-
tal ist social fonnations. The late nmeteenth century , . ,
1
..
. . I. . what becarne knO\\ n latct t lt.:
dations of geographical and soctal mcqua tty
10
1
1 ar
1
d sqi
1
1
. . ked by gconrap 11ca ...... '
'devclo ed rid' (Pollard 1981 ). Oe\clopmcnt \\aS mar . . c . . ..... _
p o . . . d ol itical orgamsatlon agamst Its In JUS
unevenness and formed the bas1s of social an P . . (P
11
rd I999) in the midst
t nd trade umons o a
tices, for example by the labour nlovemcn a . . d le Jacics shaping develop-
f
. . . . I. . d banisation TraJcctorrcs an g . .
o raptd tndustna tsatton an ur .
1
.. , d regions are still bt!mg
. ld . dustnal Joca ttt es an .
n1ent were established that. tn son1c o tn
grappled with today (Cooke 1995). k ,d b ntemational conflicts and the
h t y was mar e Y
1
The early part of the twcnttet cen ur .
1
development persisted and the
local and regaona
Depression during the 1930s. Uneven d , t. nal state action ofthe top-down
. . . lly prompte na to . d
social and political imphcattons typtca h h dest hit areas with localise
Y
tten only t e ar
variety described in Chapter I. et,
0
'
: 2S
'
-- -
":.
.Jt;V. ' .. ......_
\ RODL CTIO \J .
J bli . polic\ attent1on. Nat tona l
I
' nt nxct \ CCJ pu t ) .
f ations of hit!h uncrnr
0
) . . 'lJ pol ic\ cn1crued as I rest dent
conccn . -. - . Ill rcgwn, . o .
mtcn cntJons and institutional tnllO\ n Jl \tlthoritv and its industnal n1ndel as
. T ... sec \ t C\ f
R ) C\ pioncenng ' . . , . during the J nne ' ' ere 1111rrored
Ol " tl ... L nJtcd ....
art of the fcdef31 Dealm lt: ( f
1
d m and \\ illiarns 199-0. Sorne undcr-
p.. . \\ 'stern luropc u M
here. pat1tcularl)
111
t: . ... t ...d of o' crdC\ eloped core reg tons
f the connc t: , . . 1 !'. -1
tandtnn: of the nature o t . ttions \\USC\ ident but tn1tt C( ( tv organ
. .. .... Jhcrnl \\ It 1tn llc . .
and underdc' eloped pt:t ' :::- t' lt 'rn lt ional inst1tuttons that heralded the
' th .. esnbllshm 'nt o u t: <
20tH). The L ' . t'
1
th ...
1
Table 2.1 dew i Is the character-
f de clopmcntalt:m up un I t . .
post-\\ ar era o '
1
nt 'Kross a ran cr t,; of dtn1ens1ons.
. . . . b. d preach to dc\ l oprnc ' .. ... o . . .
tsttcs ot tht. toa ap . . f' d ... , ' lopnlent' a rati onal and soctahscd tnter-
d
. d pro ore n e not o c t.:
enn tan f h , n .. , i tence shaped thi epoch (Pcet 2002). The
, cntion for thr impro\cment
0
ur
11
'
1
t:d .. called Third V\1 orld' countri es and
hrnch focu upon - '
de' clopment que. tiOn ' 'a . ' ::: . c. . A . d L .
. 1 atwn that atllicted n1uch of A1nca, ta an attn
the po' crt\ and economH.: ,lgn, .
( n and torpcr 2003 ). Local and regronal deveJopn1ent
Amenca at the tJme co ' . . . .
I h b. 't t' tll" top-JO\\ n national pat tal pohcy dtscussed tn Chapter 1
common ' t e u JCC o '"' . . . .
h and oc1ar rat ton 1le focu ed upon gro\vth stimulation and red1stnbu-
'' tt an economtc ' . . .
tJOn to Jagging localitie and regwn . En\ ironn1ental impacts and sustatnabtltty were not
i. ue at ...the The po t-\\ ar gro'' th of the 1950s and 1 960s generated optimi sm
about the Ke\ ne ian belief in the capac it) of the national state as an agent for de vel-
-
opmcnt and national macroeconomic management following the successful experiences
of the economic recon truction m Europe. under the Plan, and in Japan. The
deepl) embedded tructural problem- that were to hamper development in developing.
and re tructuring de\ eloped countrie were poorly appreciated at the tin1e
and Dietz 2004). Local and regional questions remained as development
concern> for man} nation tate 11 1th regi onal problems arising from the spatial dispar-
ities and inequalitie- in economic and ocial conditions ll'ithin nations (Annstrong and
Taylor 2000). In the context of Keynesiani m. reducing such geographical inequalities
II a cconomicall} efficient and ocially equitable. supporting its position within cohesive
natiOnal poltttcal often of a social democratic hue.
Strongly influenced b) mode h .
. m1sat10n t eory, de\eJopmentahsm was typically under-
toed a natton passing through d' . I .
. . . tstmct C\"O uttonary stages. Each stage had a progres-
sn el) more modem character
(C}pher and n t JQQ
10
economJc. soc,al and political (democratic) terms
IC z - 4) In the "Cold \\'
de cribed the pinnae I f d . ar context. US liberal market democracy
eo mo emtsm For example R , (19 .
gro\\ th model compri ed h "- ' ostow s 71) ' stages of economic
"'"' pat s rom the tradition 1 h
take-off. the drive to matu t d a society. t e preconditions state, the
n Y an the final high .
\\ere predictable Jincar and . mass consun1ptton stage. Such stages
F constttuted model de\ci .
ormerJy 'backward' unde d opment tra.Jectories for nation states.
't; ope state could
developmental stages The . b progress and moderni se through known
. ) ecame 'developing' . h
towards the particular western d
1
. - tn t e course of development -
. mo e of cap t' r d
export-led tndustrialisation of the.
1
.
1
a tst evelopment. The relatively late
new Y 1 ndust 1
and T a 1wan from the 1960s a . na
15111
g countri cs' of Japan, South Korea
. . I b' , . . .. ppeared to rem force th l . .
lea asc of th1s understanding of .
1
.
1
. c t leoretJcal relevance and emp1r-
ular, it l!stabl ished a precedent t; c cl I e opmcntali sm. (Storper et a!. 1998). In partie-
or P aces to jum .
1
P
0 1
eapfrog onto ne\v development
c:
'0
Cl)
e
Q)
Q)
"

N
Q)
-
ca
...
<1>
E
-..:.;:
'0
'"'=
....--..
E
(/)
- lo-
co
.....
Q)
c
0
2
-
>.
E
0
c
0
(.)
Q)
-
co
(.)
- ...,
-
-
0
a._
C/)
-
co
0
a.
(/) -
+J.C
Q) (/)
c:
'- Q)
CO N
-
Q) (.)
Q) (/)
::>
ro
'> Q)
>
(/)
- (.)
..... -
co
- -
0
c a.
-
O.>C
........ -
co+J
> c
- Q)
'--o a_ _
.....
c:
(1)
E
(1)
'0.0
co
-
E
(/)
-
-
co
c: c
co - 0
c: E o
0 () '0 5>.
- c - ..... -
co E- (/)
(.) . 0
- 0 0 a.
-c u-
e. 0 -
(1) () X E
lo- Q) (1) C/)
ro-2 :.=
c co _ ro
..... c := c
C/) 0 N 0
ro ..--
""0 ro '- ro
--
Q)
'0
0
E
- .._...
0
...,
0
c +J
(1)
'0.0
E c
- '0.0 a. C/)
0
- - - - - co Q)
.D
-
> 0
()
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Q)
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-
(1)
-c
(/)<1>
-
--o
c: c:
0 co
'ZQ)
co '-
C/) ::>
- +J
- ()
ro
- ::>
lo- lo-
+J +J
C/) C/)
:::3 ro
'0 \....
c'C
- - ..._.,
c ...,
.Q c
+J (1)
3 E
- ...,
t) C/) E
:leo-
(/) - - Q)
_.!., +J\-
1.... () co
0 :..= () '0
a. .D c
E
::>""OCO
_Q..W_.l
C/)
E
C/)
-
c
co
.s::.
(.)
Q)
- ....... co
c c
(1.) 0
E -
>o W
co .
c -
co co
E
-Q)
0
c
co
- -
-
co
-
co ...,
c
Q)
E
Q.
0
-
-
Q) (1)
C/)-'0
c '00 co
a. c -
'- - >
(1) c
..., c c
c co 0
Q) - -
Q. +J
- co 0 - C/)
co -
E E
0 c Q)
u <l> ""O
a>. o
-o E
-- - - '-
u O'O
0'0>
$c.>
...,0"0
C/) 0 =
'- G> .C
U:(f)l-
'0
- .......
n'l (/)
. (/)
-
(/) ....... (.)
- 2o
Q) (/) (/)
> c (/)
- - Q)
Q) c Q)
'0
.......
.,.... >... -
'-'() .......
c - (1)
co 0 a.
- a. E
co 0 c
c::::::- o
0 co
0
-
:;:;uu(O
co 0 - \....
c-EQ)
CO'OOC
'- c c Q)
O.coo'OO
0 (1)
(f) wa::
c
0
c- - C/)
co co C/) ...,
c c c
- 0 Q) co
E - '-
co 0 Q) -
>
-

N
c
C>
>
0 VI
cr E
-
oo-
- l{)
a_ _,...._
:::1"-(j)
-
e,--
"0
r-
-
ro
-..J
iv o c.>
- .::s:.
ao,_
-o.r:: ro
o E
- '--
w
(/)
......
- c
m
E
;:;,a.
=> 0
...... -
- Q.)
...... >
(/) Q)
E--o
. .
Q)
:;,
0
<f)
WHA"l KINO or LOCAL
_ AND REGIONAL DEVELOPMENT?
tnt jectone'-. Geographical di ffcrcn ttat . .
ton J1l!rstst I l
' . . I . . . " I . . . . <.:( ' lOWCV<.; I .
ant s ,ts H.:,\ and mstttut 1ontl f' t . r, Wit 1 dtfferent national\''
c ,tc or s hamper 'd . drt-
modernt satton for example
1
d .l! some state<; attempting simi!
r n l (.l up until the 1990 . . ar
2. 1 ). 1 he heyday of dcvelopmentalisn
1
'
1
.. . s (Chtbber 2003) (Table
. tnt us era was pnm .
1
"
and the national level. an Y 1ocused upon economic
1 n the 1960s, to devclopm, t .
. . . . en exphctt1y aimed . t d . .
tor wealth crcatton and enhan ed . . a re tstnbutmg opportu-
c economtc well b (rl
Dissati sfaction grew however concerning th, , . - etng \J asmcicr 2000).
c nan ow and econ .
1nent that equated it solely with incrca\cs in . . omtsttc vtcw of devc1op-
mcome per captta (Peet 2002 (' h
Dietz 2004 ). An emerging th h ; YP er and
at t ere was much h
social development and well -being than J. ust in , . . fi . . more to uman
crcasmg manctal mcomc A E
1
2. 1 illustrates. attempts were made to broaden the f f. s. s c
.d . h . . no ton<; o de\ elopment' Frustration
""as ev1 ent vvtt the hmtted andtor unequal 'tnckle d , ' f h .
. . . . O\\ n o t e benefits of cconom
1
c
grO\\ th. Radtcal cntlques from the late 1960s inspired b . h.
. . y
1
rtanust t mkmg) argued that
the path of development tn the developed had active! d d 1
. . Y un er eve oped the South
through colontaltsm and the nco-colonialism of its incorporat
1

0
th.
. . . . n Wl m an mternatton-
altstng syste.m and, as \\ e explore in Chapter 6, the activities of increasingly
transnattonal corporations (Frank 1978; H) mer 1979 ).
In para11el, greater attention \Vas given to local and regional development questions
beneath the level of the nation state (McCrone 1969). Economic and social arguments
were marshalJ ed in favour of regional policy as a means of reducing spatial disparities
to improve regional and national econon1ic efficiency and to contribute to social equity
(Armstrong and Taylor 2000). The poli tical claitns of wave' regionalism emerged.
particul arl y in \vestem Europe, and articulated its dissatisfaction with their limited rela-
tive autonomy and Je\ els of ' de\ elopn1ent' within often centralised national state struc-
tures (Keating 1998). Connections bet\veen the colonialism experienced by the former
in1peri al possessions of the Great Po\vers and their own peripheral subnational regions
and localities were even drawn (Hechter 1999). Relationships between the colonial
powers and their empires had for the regions of the metropolitan powers.
shaping their functional specialisations. f or example. Cain and Hopkins ( l993a. l993b)
have shown hovv the fate of Britain' s industrial regions \\as cruciall y linked to the
shifting role of the City of London as the dorninant financial centre of the Briti sh hmpi re.
The break-up in the mid-1 970s of the cconon1i c and social settlement of
d t ' f the post-war pctiod at lea t for
had underptnned the relatne growth an prospen ) o '
f h al state as an
much of the devel oped North. undennined faith tn the power o t ,.
. f . h I 1996) Oeindusrnahsauon and transt-
agent of development and regu1att on (\tc\ JC ae . , , . . .
0
d
f cononuc and soctal n:stntdunne.
tions to\vards a service econon1y unleashc waves
0
e . " , d
. , . . hiohly oeographt call y unc\ t: n an
The era of developmentahsm ga\e ""a)' -
10
. a o f . :;:,] b
1
.- , from the
d uncertatn era o g o a tsm .
contested n1anner - to an emergent an
1
fi om the earlier era ot
Table 2.1 illustrates its tnarkcdly di fferent constituent c emcn s r
developmental istn. . t Keynesian ism. statism and
. . fi the late J 970s agatns .
A counter-revolution set tn rom
2002
) The ascendancy ot mone-
morc radical development theories (Toye PeeRt . ht .. ught to roll-back the state
. 1 f the New tg so
tansm, neo-liberahsm and the po tttcs
0
. . k (J ssop 2002). Transnattonal
d l
.b lsatJOn of mar ets e
and promote the deregulation an 1 era
1
. - . -
-
30 .
- -
Example 2.1
Broadening the measures of development
, . , f tlll' In t'l dt'\ dt)pnwnt l>f twttun.
11
... II , ll\ mH"h t\ tllt.tsllld .
hl('lll\. ,\ \ \.ll , , , l 'I'M Hl k\ t') \\ I d-
1 , l h sill'' CCt>mnnJl' \'nn\ th \lt' ltll \Hlll I . .
t'l ll\ \ u. . ... r 1 k\ d" l)r dl'\ nt .tnd tlll'Ollll' PL't' person
I l'l'('\.l ,lppn)\Jlll,\11..' \) . . , )
. . \ f' .. \IJJ\11 tl<\lh.ltldl rnoduct (< I :
a loe.tc.tl stlt \'l g.m:"' :: " . . ,
." . ....
1
1 ) Ju t ll'l'tuino tt> l)l a cnuntt') cd lrnm
t ,
1
tl , aluc .. l)t i.tll mnH111..' l>l tn l P
1
\ I. \ .
1
l l h . ) ll'l''"'dl>fllt'stllpn.)dud(GDP:h.>tal\alucotalltncotnc
"uhm 1.Hlt\\ tth t at l'\'ttntl) ,u" !.! l . .
t . d r
11
th. h ,nkt-.. t countn) t) ptcJil) used. ott en wtth
'
l'r hnal pr"'\ Ul't l't \lt \\ t ll \ " . .
1 t ,
11 1
. Hll'l)llH.' dt-.lt tbution. O\ er purchastng
hll popu .1 tl ' ... . . .
.
1
i tll, ntnhutwn tht' \\ h1k that part rc-
"l)\\ \ ,ltll n . . . . . ... .
ulnr ilh \,f might nh'h' than . unp1)' nsltlg mcomes. cconon11sts
are.ued that 'th1.' of the of de\ dopmcnt that countries
miuht \\ j,h tl) arc mon.' .. -..: ' att uncd at and tend to acc01npan; higher 1 ncon1c
"
k,d, and 2004: 'OJ.
\-. dt ,,ui,t:lction \\ ith nHe'\ of l'\.onomic and tncome grO\\ th and geographical and
-.,xr,\1 dt and bw.J(kr notil''h \\hat de\ clopment' cn1crgcd,
1 mdkator' that go ond narTO\\ of grO\\ th and 1ncome have been
ought. lconomic gro" th the HKomc . tandard \\ere seen as being too aggregate and
l
unabk to c.tpturc dt-..tnbutwnal inequalities between people and
1mbidity and mortaht) too. continued to undcrl inc gcograph ical incq ua I i tics in
'"ki.tl condit1on .... health. well-b ing and quality nflitc. Other measures include the United
\.H11.1tb Prt,gramme. (UNDP) Human De\elopmcnt (HOI).
mdcx 'long \ity. kno\ ledge and decent standard of }j, ing' as the indica-
")t dopmcnt. H_DI "' of life. at bi11h. adult ltkracy. school
nrolmtnt and parity rDP Pl'r capita .. \s the l'. DP argues:
Humun de\ clopmcnt b h
. . , . L a out muc more than the ri c and of national
llli..Omo. lt ts about creatino an . .
f
11
. ' en\ tromncnt m '' h1ch people can dc\'clop their
u potential and leh.l produ ti . r
interc"ts p 'Opl 1 l.: \c. creative 1\Cs in at: cord with their needs and
are t h: real "ealth nf nations.
200 1: 9)
Other broad b . ,
1
.
- - ,lsc(. mcasur, . h .
lndl'X and I Iuman Po\ . 1 d' h SlH.: clS the Gender-related DC\ clopn1Cill
. b . . . c n o., a\ c also been d , 'l d 1 . .
out 'ustamabthty. . .
1
., c\ c ope n conncctmg \\'lth concerns
J . SlK ' as the Clenuinc p , , . . . , . .
lll(;nta net domestic d rogrcss lndtcator ((.J>J) and envlron-
th . pro uct ha\e been d, . I d
c natiOnal accounts of cconomic
1
1
_ . l:\ c ope too as an attempt tn green
op I grO\\ t l . 1 hc thmk. h t .
mcnt 13\ C' been explorcd for lo .. I' . , . . . tng c lJOd broader of de,cl-
\\ her .. tt . . . c.t .md rcntons f ' . . . . . .
l: h.: Ollis on gross ,aluc add ,.a (( ' \ ' \ e> ' or example 111 the lJnttcd Ktnudom
of cu
1
f ) hts b ...
. cornposttc oualit) of Life' and .L ... b. . . ccn accompanied by thl! tll!vdopmcnt
t1fiable an 1 ,. 1
1
l\c,l tltty tndite ( ' .
l .u ,w c data to ... , . . s. otng hcyond the readtly quan-
acutc flit ' " , .. , noti f
.Jsurcmcnt ons o development presents often
Soun:c H . ,
1
- -..
.. ousc o Commons ( . .
- ). l yphcr and Dietz (2004 ): Morgan ( 2004)
WHAT KIND OF LOCAL
AND REGIONAL DEVELOPMENT?
blol:s around Europe (the F . ..
.. tnopl!an l:cono . C .
Un ton (I :U)), North J\mct1ca (NAF' . , mlc ommunJty (EEC) and later
the Amerkas (F r AI\)) and South l"ast A . ( ' ': ..ttnd the potential Free Trade Area of
. ... Sid ASI: AN) stru t , I .
cl:onomy and wtth uneven aims or c. . c unng t 1e cmergmg global
. conomtc and polttical . .
de\ clopmenl were now predicated ll))on . t' mtegratton. Progress and
. . . . n,t ton states and thei f . , . b' .
w1 thn1 raptdl y markl!ts .
1
.
1
, J<.\o(
1
mns d ll1ty to compete
. lc Js marked 1
rcstructun ng. structural adj ustmcnt and t a
11
g
1
pomt of market-led
( mcvcn and unequal local d .
oprnent in many advanced states. l'hc d, ,
1
, . an regtonal dcvcl-
. . eve opmcnt pt oblem was se . . . , ..
one of n1arket fail ure. 'Second wave' or 'new' . .
1
. en as a concl.:tttblc
. . . . , teglOna tsm emerged with an economic
focus as rcgtons wctc encouraged and facilitated b d
1
. .
i
. Y evo ut10n \\'lthtn thctr national
states anc prompted by thetr n social and poht' 1 .
. tea to become responsible
agents of thctr O\\ n de\ clopmcnt (Keating 199X ).
ln the context of the end of the Cold \Var and the 'Vel t R 1 ,
. ( ' 'e evo ut1on m central and
Europe tn 1989. a tentatt\ e 'Third \Vay' emerged in th 1990 c
11

. . . . e s 10 owmg dtssat-
the htghly unequal development outcomes of the market-led 1
9
80s and
an unwtlltngncss to retun1 to the national level stattsm of the post-war age (Giddens
1998). Advanced industrial countries alongside economies undergoing transition from
central planning and countr1es fom1crly con"idcrcd as 'developing have been reincor-
porated into a much more global development (Scott and Storper 2003).
Combinations of state and tnarket have been sought to cope with the risk. uncertainty
and complexity of increasingly rapidly changing and reflexive forms of
capital i 111 (lleld et a/. 1999). HO\\ e\ cr. such experiments coexisted. even overlapping,
with the dominant washington Consensus propelling the turn to neo-libcral approache.
to development in 'de\ eloped and de\ eloping countries. Free-market capitalism.
open economics and conservative macroeconomic pohc) constituted the political-
cconOinic orthodoxy. Constructed b) the actions of nation states and supranational insti-
tutions ( llirst and Thotnpson 1999). as \\ c dtscu(.,scd in Chapter 1. gtobalisation' during
the 1990 pre entcd formidable local and regional development challenges in a more
integrated, interdependent and competitive \\ orld (Peck and Y cung 2003 ). Devolution
and the decentrali sation of state forms ha\ e emerged internationally, often with
ambiguous implication. for reductions in regional grO\\th disparities (Rodriguez-Pose
and Gill 2003 ). Substantial pol icy cOt1\ ergence is e\ ident around a nco-hberal agenda
1 roct1sed upon !lex-
among developed and, tncrcasmgly. de\ c optng nat10ns.
11
,
. . . 1 d oe anomie stabilitv
lbtltty, the development of econorntc san macr c ". .
. . h 1 the 'ontext of mtcrnatwnal
2000) (Table 2.1 ). Indeed. as "c 111 C apter
111
c . .
fiscal conscrYatistn and trade liberali at ion under the \\'orld Trade unc\
. , -.. . . t rallY haYe been n:mtor ... ed by the
dc,cloprncnt at the local and rcgwnal lt.:\ ds ma) ac l . . . ,
. fl t n combined ,, 1th ltmttcd gll\ em-
priority given to incrca ed free and low 111 a
10
....
mcnt expenditures for economic adjustment (Braun
1991
}.. . .... bTt a ld
d
d f th "r tO tncorporate 1 I ) I
By the 2000s. had broa cne ur d n nt
1
1 l.oncerns
i . soc tal an ern trom l: '
hoi istic or integrated approaches to c.
1
) r ... J )\ ... nunent and govcr-
. 1QQ4) ( C xamplc .!. ' Ill: l l:
(Geddes and Newman 1999: 1\ttorgttn -
1
31 1 --vel in macro-level
1
f .. at the suprana tonu l:
nancc of development had come to t
1
e. ore ' A _ with varying degrees of
l
. I .... A "rt as and East
)locs -- the European Unton. t lt.: mt.: L
f 31 . __.._ . -
INTRODUCTION

-
'

Plates 2.1- 2.2 Local a d
n regional develo
- ..
...

...., .
...


. '
'

the 'developed' , pment as a global 1 .

Sourt.e: PllotograrJil s ty M
1
and developing worlds ssue. poverty and deprivation In
J IC H31C Allan
WH A r KI ND OF LOCAL
. . . AND RFG I ONAL DEVELOPMENT?
tnt\,;gnt tton and wtt llln nation sttt<: . , -.
'sas part ofthc Q , . . .
nnd Dcvl:loruncnt and Wt II 13 rgantsatt on for Economi c C .
. . >r < ank's 'good , ooperatton
western H.lcal s of 'development' . d h . governance' agenda. Disq h
an t c
11
npos f f . utet wJt
market dcn1ocracy have mobilised .
1
.
1
ton Western models of l"b
1
<.: atms for self d t . . 1 era
rcga n.llng the definition and means f ' d - c ermmat10n and empowerment
. d . C'l . o cvclopment' p
tn 1aptcr 3 has cmphasi d h . . ost-dcvelopmcntalism _
, t c potcnttal rol e f . .
mcnt , perhaps con1plcmcnting state an
1
, k Cl vtl soc1cty tn ' develop-
. . . < mar ct, as an t .
localttt cs and rcgtons with better undc t d' . au onomous cnttty embedded in
. rs an tng of their 1 .
potent tal. A post-4 Washington Con<,cnsu ' h . b . socta asptrattOn(), needs and
. s as een dtscerncd in d 1
upon a rcv1sed nco- IJ bcral model strcssin . k . eve opment, focused
g mar ct-fnendly stat .
governance' (Peet 2002). e mtervcnt1on and 'good
Currently, local and regional 'dcvelopm f .
en I S a more global issue than hitherto:
as globali zation and international cconom .. t. .
. tc m cgratton have moved forward
older conceptions of the broad c;,tructurc of ld . '
. . wor cconomrc geography as
compnstng separate bl.ocs (First, Second and Third \Vorlds), each with its
appear to be giving way to another vision. This alter-
native perspcctt ve .seeks to build a comrnon theoretical language about the
devclopn1cnt of regtons and countries in all parts of the world, as well as about
the broad architecture of the emerging world system of production and
exchange . .. it recogni zes that tenitoriec;, arc arrayed at different points along
a vast spectrum of dcvelopn1cntal characteristics.
(Scott and Storper 2003: 582)
Thi s brief hi storical context of the definit ions of local and regional development has
identified the evolution of views of 'de\clopmcnt'. Each has their own theoretical and
ideological basis, definition of ' development'. theory of social change, role and agents
of developn1ent and local and regional de\ clopment emphasis summarised in Table 2.2.
The hi storical evolution of development has hi ghl ighted several central and recurrent
themes in di scussions of the definition of local and regional development. First, notions
of dcvclop1nent change over time. Hi storical evolution, critique and debate arc central
alongside the interests of those involved in shaping their determinat ion. Changes in
existing understandings have en1erged from both radi cal and more moderate. reformist
critiques of existing thinking and practice. Second. definitions of .are
geographically differentiated. They vary within and between places tttnc. TIH.rd .
the historical focus upon econon1ic dimensions has been broadened to mcludc Sl)Ctal,
I
N J1 and mctsurcs of de\ dop
ceo ogtcal, polttJcal and cultural concerns. C\\ approa<.: ' .
1 .. d f;or oci11ly determined and
rncnt have been sought that arc n1orc sens1t1 ,.c to t 1c nee s '
. .
1
l'tic
1
t ecological and cultural
sustamablc balances between the cconom1c. socta P
0 1
' .
. . . h . .. th. local and rcgwnal level
duncnsions of devcloprncnt. Last, dtf fcrent cmp ascs
011
c . . . , ..
. . . . . . . f d. , lopmcnt. The nat1onal and, tm:rcas-
CXISt m different approaches and defimtwns
0
c' c
1
Th
. . . t , the )o(;al and the rcg10na . e
mgly, supranational focus has evolved to Jllcorpottt c . . .
. I th.. "cogmtJOn that development lS
"where' of devclopn1cnt has become important wtt
1
c n;;
not just a national level concern for nation states.
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WHAr KIND Or lOCAL
AND RFGIONAl DVElOPMENT?

Where Is local and regional developme t?

space, territory, place and scale n
'Tenitot y and th potential
not -.,olcl y a men.: space.
resources is the matn
resource' for
(Can;anclli 2001: 6)
1\..., (I iancarlo Can;and I i dcvdopmcnt do. k .
cc., not ta e place m a spatial '
devoid o I' any gcograph icu I or context ll . . 'acuum
owevet tt may be understood
dcvclopl11Cllt IS a profoundl y geographical phenomenon 1 b '
. . n a stract terms the social is
seen as necessan ly spattal. A':-> \tlanucl Castclls ( 1983 3\1) t . . '
. . . , . . . , pu s tt. space 1s not a ret1ec-
tton of soc1ety . 1t I S soc1cty . Any definition of local and region 1 d 1 .
. . a eve opmcnt reqUires
an apprcctatlon of the fundament ally geographical concepts of spa
1

1 .. . . cc. crntory. p ace
and C1Cography IS an mtcgral constituent of economic soc1al ecolog 1 1
1 , . !lca . po 1t1ca
and cultural and their geographies condition and shape in profound ways how
such processes unfold (Markusen 1985 ). The local' and the regional' arc not simply
containers in which such social processes arc played out. For Scott and Storpcr (2003),
spaces localities and regions arc causal or explanatory factors in economic growth
not just receptacles for or tnanifestations of outcome':>. Local' and 'regional' are
particular sociall y constructed spatial scales through which processes evolve. Soc1al
processes arc inseparable frotn their geographies. An) sense of the development' -
ho,vcvcr defined of such or the places m which they arc situated and through
they unfold needs to recogntsc thi::, mtcgral role of space. Put simply. geography
.. cy and Allen 1984 ).
.
. .;,JI
.....
Territory t\.Jers to the deli1nited. bordered spatial units under the juris.diction of.an
adtnini strati\c and or political authority. for mstance a nation state. ctty or regiOn
(.\ndcrson 1996 ). The expression of localities and regions in which different kinds
t .. fie time period is often as tern-
de\ cloptncnt n1a\ or not be taktng p m ::,pect
. : . . , 1
1
l a
1
d identit). For example.
torially bounded untts \\ tth an t;. po t tea t t :s .
the of Brazil, Canada or lndonc>ta tace particular local and
.... . . turcs \Vithm terntones.
mcnt questions '' ithin spcctfic struc . . _ .
1 1
b d
. " . . . h a ot captta . a our an
and quast- or non-stJtc tnstttuttOn. -.,uc . . loC'tl and
. . . .t. d "<' e.. and m dtfTercnt s t n ' ' -
II soctety engage to u1 t:nng \. ' Ct
4
addre'"e!) tht tn more
d
. . ... t and ,.
0
, crnance. 1apter .
de\ eloprncnt an tb go' Cl ntllLll .. :::: . . h.
1
articulctr derlmtwn-.. .?.nd
. . .. . . . t' l t1n "d wlthlll \\ lC 1 p
detail . 1 ern tonal boundat onn L e t: '
1
. d dctcm1ined and
. . . I d... I 1 'nl 1113\ be drttcU ate . . 0)
ku1ds '-'t local and rcgtona t:\\,; (
1
P
11
t: . 1Tavlor and Fhnt 200
. . . . pl 'C or umc. ho'' e'er \ . . I
T erntorv ts tll)l a tn l . . . . that aft\! .:t local and reg10na
. . i I an,, O\Cr wnc tn h'
Local itics and regtutb C\Oh c c "- _t.\.: _ .. 1991) ..1rc t t:)
. . . . , . . .. . d I or p \ . . . . I o-
de\ dopn1ent dctintttons. .m P . lT 'l)nomic. pohtH.:al. e
0 0
=
. . . '"' . . . r J'-' C\ uh 111= c.... . . I i
bccon1c . Locahttes and '- . h 0 (t .!Itl
1
I
"' tlrln \t,\tt C. tllll Jn::::H1= . et at.
ical and Ct1nstructs. RJt l\.:r ' ... . .. :i \ tor!.!all l l.
1
"'
11
t
. l' (COOkt: Jill . - .. tl .,
. . . l 1 1,)\ er tn t.: l her .. rh ..,r Ill u.:-n ...
arc dvnanuc. '- l:lt = J .. r '' I.
. . ... 'tltlPL)un l:l. I . tl t th"'' ar ...
t 1998) consider localities and '. L. rcbti )lli.l
111 13

1
. . i
1
.. t --tTih_)nal lll)un .. . .
1
i '..:-J. tcrnh.lna
and spat tal reach 1s bcyt1nt t
1
'-
1
r t.: .
1
-... i ._l)ci.1l rdath"'lb- l1l
. d.... cbs ot
tnutuallv eonstttuted by '' r "

I TRODUCTION
I
. h rcoion" lan .tcquirc altrihutcs an
1
a.. mo d and nrt . ,t . n .." . :: ( { . l I u I I .. c l
b }fCl.' , vt: = .
1 1
. R l,ja h ttlH( (llll' arll f'.\l t'
. f(,r c.
4

1

b ha\ e 1... l)O . , J , .., ruti<)u.t '14tpc to ... pac(s of lo'- a a and regional
T
. , , ..., . oontplucal ,ltl '
1

mtol) .= l. =- =-
de' elm mcm. f
1
.
1
j reoional tit .. \"" .l)pmcnt not just an hl'tnog\::nou
. ." ltitf '' orld ' o a atll =- , . .
' . I , ..
1
ade up 01' . no part lt'Uiar From
f, ,., plan . . . . . . . I I .
or um t n - . .. 0 ach p .ll'"' 1.._ paitldtl.li. L4H.: 1 1..1" th O\\ n e\ olvu'g
......, w Honolulu ro H<'
11
.:: ' l'
1
e- ' ...
t.... .
1
orhe t.Udl'tl'r thm thctr <lssets
. , .. oaclC:-. n't HI
0
. .
1 .. wt t:'. t- 1 r t1"' poltt1s cultur " a d
t f l '0 \ lfl..l11111Cilta a\\ J t: t.: L t= 11 SO Oil
ana ... !\l.k'Jal ou m ' " . , . ..
. :, . b. bot'1 and cltttcrc:H anJ can be rnatcnall) and llbol-
.. ". h uJ ar t. '- "'.m . .
1
. . , .
. Lfi no 1( at md reg tonal de' cJopn1ent. \\ hdc each place may be
tcaJh amportam to lk Ill e- ' ' - .
. .,. dt .... lc alit ,1nd na) hare ron1n1on ot devel-
umque. hO\\
1
"' "' - .
d
: ..... '\m.u '-hall nl .... nt " Indeed. each a posJtton within
opm nt. an ::- .
1
101
...Qfat d and \\odd. The de\ clopmcnt fortunes of
an mcrt ..... 1E!' .. '
'
1
.... 1'ntert" ined. Recognition of difference and need not
ar... \. (.; .. " ::: J -
. ...,1,, tr. '1" . .,. 1nr ........ . parochial and mtro pccttve defimt1on of local and
ne""' . a ... " " . .
de. e 0 pment. \, l hapter 1 cJlcd. inter-territorial competition ,feen
ol;ce:: in :he global context be inefficient and \\a teful of pub I ic and pnvate
..:rce' , and Arbix _QQ I) .
...
Plate 2.3 Public demonstrations
marches in Scotland d political agency: anti-poll tax and anti-warrant sale
s ur.ng the 1990s
ource: Photograph by Mtchele Allan
WHAT KINO OF LOCAL AND REGIONAL DEVELOPMENT?
The geographical of places shape!:> h , .
1 1 , ... ow anl w 1y local and regional de 1
opmcnt dcfmtttons vary both within and between . . \C-
. , . countncs and how thas changes over
In thts way. local and rcgtonal development d
J., context- ependcnt:
Economic dcvclopn1cnt is not an obiectivc per e lt , . .
J :-; ts a means tor achtevmg
well bctng. accordtng to the culture and the cond
1

10
f
. ns o cct1atn populattons.
the well bctng target is not the same "o 1 1
, Jl r peop e tvmg m New
\ ork or 111 Maputo; only who ts living in New York or :\.1ap t ld c h
1-r u o cou nx w at
the} want to achtcvc m the medium and long term.
(Canzanclli 2001: 24)
The unportance of place means local and regional development traiectories are stronol ,
c)
path-dependent (Sunley 2000). Their future development is unavoidably shaped by their
O\J..' n hi storical e\ olution (Clark 1990). Phenomena happening in the present trail long
tai Is of hi story (.Allen et a/. 1998). Such historical legacies can be decisive in under-
standing and explai ning local and regional development - as we shall explore in Chapter
3 and it, C\ ident in our case studies in Chapter 7. The particular attributes of places can
influence '' hether or not particular definitions and varieties of local and regional devcl-
...
opment take root and fl ourish or fail and wither over time.
[n common \-Vith space. territory and place, the geographical scales O\ cr and through
\\ hich parti cul ar economic. social. political. ecological or cultural processes arc mani-
fest arc central to local and regional development. Table 2.3 provides of scales,
Table 2.3 Scales, socio-economic processes and institutional agents
Scalej /evel
Global
Macro-regional
National
Sub-national
Regional
Subregional
local
Neighbourhood
Community
Socio-economic process
Trading regime liberalisat ion
Information and communication
technology network expansion
House price inflation
Transport infrastructure
expanston
University graduate labour
market retention
l abour market contraction
Local currency experimentation
Social exclusion
Adult literacy extension
Source: Authors own research
Institutional agents
International labour Organisation (ILO),
International Monetary Fund (IMF), World
Trade Organisation (WTO). nation states
European Union, Member States,
regulatory bodies. private sector
providers
Central banks, building societies,
borrowers
Public transport bodies. private
companies. financial institutions
Universities. regional development.
agencies. employers. training provtders
Employment services. trade unrons,
busrness assocrations. employers.
employees
Local Exchange Trading Systems.
households
Local authonties, regeneration
partnerships. voluntary groups
Education and training institutions,
households, families
3$
- -
I
_ - . ,
1
,. 't1h It ways in "ht\.l
md m .... tuutrond .1=-L
, 1. c ... ' _ ...
1
-
1
) ..
1
1 tnd rcgtonnl de\ l:ttn \\ 01 k
' - II\ COihtttllt \\. l) l L' .. -
dif ere 1: pn. rotultt,l . l th ' trtiolb 01, partll:Ufctr \\ htfc th\::
I- l" "1t ...c l \. ,
Jcr0, .1nd bet\\ ccn t
11
t:rt:
1
. .. t a . Jc, for the ot dt'\ dopnknt
' r " l he "pcC1 nc "PI I ..,,__'
'h.)!..'ar and the rcgwnJ an.: h ... )fl ' tt the and the '><."<lks
- - h bo 1k " H e.lk" ... ,
that ,Yc the
01 1 1
" l
1
. .. ath nrt"k'C' unfolding ttl lc\ c)..., <1nd
- d f 0111 thctr rc dtton '' r-
dnon:c r . 1 ,.
1
is mutual!\ the\ m<1k.c
1004) Each cHlt tC\ \. ..
JQl)
4
I())) cannot be as
h h,.. Jones c. r a/. (- -"" 1 1
un t c ot t. r. .. . , tnJ .... drc n1u tJ-sca ar. constl-
b nd --d 'ldmmr tratl\ '
ou c ' , n,Jn the P'lrodHa1 to the global'. Phcnon1ena and
b . thar I
t'"-'
3
r _ w b, e ... rcmar or outside. since the)
that
0
.... . } c d
h , . 1 f particular locauttcs and regtons. can l a \ c protoun
to PC on a l e ,..ontt o o . . o ..
'1 .., d' . ... . 1e local - .... tabthtv b) a olobal trade
irnp ... c:.... Exampte -- ' l '-" ' .
-.J . , .. for mstance b) states and assocJa-
("JC!- are conte.:>(.; an\.. '\. '- .. . . .
.
1
, b . d ct\ - ic::n '.'. 1997). Tak1ng Into account the
ttO'"' ot captta . ta our an ' '- '-' .; -
Example 2.2 Global trade disputes and local economic
instability
The connections bet\\ een different of local and regional de\ elopn1ent were
deml'rbtratcd in C'-called Banana \\ ac in t late 1990s. As part of a trade dispute
bet\\ e n the UniteJ ..md the European Union through the \Vor1d Trade Organisation
(\VTO) regarding the preferential treannent of Caribbean banana i1nports. the Lnited States
retaliated by li...ting a rang-: l)f EU exports subject to a punitive import tariff of 100 per
ent. effecti,ely pricing them out of the lucrative US n1arket. These specialised high-value
export . cho en politically to . ure upon EU and \tember States.
included French handbag Gennan coftee makers and Italian cheese. Such product were
t')picalJy produced by highly clusters. One targeted sector. for example.
encompassed cashmere producer. in the Anglo-Scottish Borders in the United Kingdom.
..... ....,
Here. the local ::,ector employed over 1000 people and was concentrated in the
' knitwear capital' of Ha\\ ick. Jim Thomp on of the Hawick Cashmere Con1pany said the
>anction- "ould cause major problems for the industrv in Scotland: 'The Americans arc I
una'' are ho\\! polarised the ca hmere indu:stry i in Borders. It wi 11 have catastrophic
effects - if
1
_hi; actual!) goe> through "e arc looking at mo t definitely a thousand jobs in
the Border A the result of a global trade di. putc. this particular local and regional
econom\ \\a de tabilised bv a prol d d f
. , . , onge peno o damagmg uncertamty regard1ng a key
expon market. The eptsodc wa fi H , 1 d r 1
. s na reso \ e ollowmg over t\vo years of poltttca
lobb\ mg bv rc!)pective lo I
. ... ca mtere t at the natiOnal and European levels. Initially. only
cashmere wa removed from th
1
-, d .
e Jst an a negotiated settlement brokered at the WTO.
From I Julv 200 I the United Stat d
. . . , es agree to suspend the sanctions imposed against the
rcmammg EL: products.
Sources: Pike POO?a ) US l b
- - c aim anana trade war victory', Guardian 7 April 1999
WHAT KIND OF LOCAL AND
--= REGIONAL DEVELOPMENT?
broader context of the scale or level of cconurni-.. . .
1
..
c. socta and pohttcal proc . 1
to dd1ni ng local and rcgronal development Th , h , esses rs centra
. c w ere of local and region I d I
rncnt is a geographical concern. Together the co . t , f . a eve op-
. . . ' nccp s o space. terntory place a d
scale arl! central to dcfin1t1ons ot local and regional d
1
n
eve opmcnt.
What kind of local and regional development?
In common with the preceding discussion about definitions the e -
1 . . . . . . r ts no cast y accepted
and smgular mcanmg gtven to the different kinds of local and regional development
detennmed by dt fferent people and groups in different places at different times. Its
nature, character and fotm can evolve in gcographicaJly uneven ways. Thinking about
....
the possible ki nds of local and regional development encourages us to consider its
different varieties and the principles and values utilised in its determinatton. \Vhat local
and regional de' elopment is for and what it is trying to do in its aims and objecti\ es
are framed and shaped by its definitions. varieties. principles and values.
Varieties of local and regional development
Different kinds or types of local and regional development exist Building upon the
issues of defining what is meant by local and regional development: we can draw distinc-
tions about its different sorts and nature. bxamplcs arc offered in Table 2.4. although
this li st is not exhausti' e. Other di mensions might be apparent or receive priority in
different localities and regions. Emphasis given to some concerns may differ and change
over time. The distinctions do not read down each column vertically in a linked fashion.
The table should be read across each row. Given the complexity and geograph-
ical une\ enness of the social \\ Orld. di stmctions may be a question degree or
extent. While ab clute development might mean an aspiration for geographically even
Table 2.4 Distinctions in local and regional development
Dimension
Approach
Autonomy
Direction
Emphasis
Focus
Institutional lead
Inter-territorial relations
Measures
Objects
Rate
Scale
Spatial focus
Sustainability
Source: Authors own research
Absolute
Local. regional
Top-<jown
Strong
Exogenous
State
competitive
Hard'
People
Fast
Large
Local
Strong
Distinction
Relative
National. supranational
Bottom-up
Weak
Indigenous
Market
cooperative
soft'
Places
Slow
Small
Regional
Weak
.39
-
. 40
.._ --
TR o 'lL C 0 t\r _
1
nd in 1 groups: t\.: htth e de, l'lol)-
1 1 ics. ' .
. l . and ll)l,l Jt l i 'fntlt or rchltt\ c dL'\
, 'llt ,, tt 1111 , , \\ hcthcr J) l c , .
dc,tll)pnH.: ,
11
dc,doptnt.:nt.
1
.. rc,lions and or nhl'tl
. '"'l:':' bUOt \t .. ulctr )<)l'a ttlt..S. :::-
lllCtll J, .. loptncnt l1f p,u til . . d tnCt]unlities bet\\ ccn thcrn. I ht't is
. I'll ..... the ut\ t: r dl1 .
P'"
1
t::- rh "r than rcducmg t
1
' f , ,
1
Jmcnt o/ or n.: Jatt' c de\ dopnlctH 111 a
.. hl t , , .. absoltttc t t' t " . l , , .
t.: d'tl"'rCllCl' bd\\ttll ()<.,<.)) " LlCh ocographH:<tl ,lt)(a SO<.:t,ll \\dfat\ '
. b nntn "
1
t 1 Sa\ t:r I ( 'I f ' c- -
"' . f'l'ion (\forgan CUl( " ( J . 'll'tt)tcr of local and regional de\ cloptncnt
lo ot . . LHt:r tn t c ',.
1. 11-. to the dLcusswn ' l , "f tnd tor local and
ct)n
11
. b .. . "here ltlC PO' c <

1
) 111) \ utom1my de ctt 1 t
1111
1 toJ
1
-d
0
,, n or n1orc recent bottorn-up
tt1r" 1< . . mpk the tnwt 1< , .
"lopmcnt rctdc. foi C'-<
1
1
c 's
111
a, be htgh pnonty and/or
l l' t.: Chl )tcr . r mp \.. . . .
. prolchc!- mtroduccd m (.I . r md or en atn c and rcforrntst.
ap . . "cat-:. t0,, pnon ) 4
r.ldi -.11tn thc1r tntcnt. or h, 1 ... tion of local and rcgtonal de\ cloptncnt may
.. ,J . Chapter I. t t uu t:l
\\C dtSCLIS t,; ll1 I nt orboth <lJ1proaches. The focu n1ay empha-
- or combtnc c cnlc .
b top-do'' n. botrom up . . . t'
1111
the oubidc and ubject to external factors)
. o or one.matmg n . .
stse c\ogcnotL (grv" . - ) d (from \Vlthtn) fom1s of gro\vth to
e or mhercnt an "' -=-
and mdigcnou$ .
1
,. d ma\ cncompa both tate and market, 'Third Way'-
d'or'c Im;tttuttonal t:a - d
'
3
0 mg t . . . ( tonal relltion n1a) be \veddcd to 1 1enng cgrees
, , , tl soctet). nter-tern ' .
k. or t:\ t:n ct . -\ dt cu. ed in Chapter 1, n1easures n1ay 1nclude
to competition and or cooperatwn. . . (". , . .
. d h d' nfra tructure and capital proJects and/or so.t tratnmg
mten cntwns focuse upon ar t ' ' 1
l rt The rate of de' elopment n1ay seek to balance fast deve op-
and techno ogy uppo .
dd
. g soctal need with a low perhaps more sustatnable, outlook.
ment to a rc pre =>In ' . .
Laru:e- and or mall- cale projects rnay be cornbincd. The spatial focus .may.
the geographical scale of de\ elopn1ent efforts. Views of ustatnabtlt ty may be
or \, cak'. The object of local and regional deYelopment may be peopl e and/or
The ubjects can be the theme upon \\ hich de\ elopmenf is based. . .
Echoi ng the broadened notion of de\ clopment to incorporate economic, soc tal. poht-
em ironmental and cultural concerns. a resonant distinction in the kinds of local
and regional dcYelopment is between its quantitative le' el or extent and its quali tative
character or nature. The quantitative dimension of local and region a] developn1ent may
relate to a numeric measure. for example a per capita gro\vth rate of GDP, a nutnbcr of
jobs created or safeguarded. new inYestment projects secured or new finns establ ishcd.
Putting aside for a moment is ucs of data availability and reliabili ty. a quantitative
approach focuses objectively on the numbers: how much of a particular something. The
focus can be on absolute or relatiw change OYer specific time periods between and
wtthm localities and regions.
:he qualitati\'e dimension is concerned with the nature and character of local and
reg10nal development c. . 1 b' l'ty
, Or examp e the econon1ic. social and ecological sustau1a 1 1
andformofgrowth thet d' , b' l'ty
. ype an quahty of jobs, the cmbeddedness and sustatna 1 1
of Investments and th h . e
. . e growt potentJal and sectors of new finns. The qualttatl\
approach focuses upon b. . 1 s
. d
1
more su concerns that connect with specific pnnctp e
an va ues of local and r
1
d . 1-
.t . d . egiOna eveloptnent sociall y detem1ined within parttcular loca
t tes an regiOns at s . fi . d
by their t pect .. c ttmes. For example, the ' quality' of jobs might be judge
erms and condtttons f 1 for
career progressio t , d .
0
emp oyment, relative wage levels, opportuntues
n, ra e Unton re d lop-
ment may b cogmtton and so on The sustainability of a eve
e assessed by t ,
1
. .
1
s eco ogtcal tmpact or footprint'.
=-WHAT KIND or LOCAL AND REGIONAL DEVELOPMENT?
The quillltitatJ vc and qualitattvc dimcnsior1s Jf. lo
1
t and 1 d
1 \ v( rcgtona eve opment can
but arc not always or necessarily coin
1
clcntal L )C l't d
, . "' . <.. a 1 tcs an regtons can
development quantttattvc terms but with a problematic qualitative dimen-
SIOn, f(>r exatnpk through Increased ctnploymcnt levels in low 'quality' jobs in unsus-
tainable in\\ard and/or short-lived start-up finns. Conversely. localities and
can wi in qualitative terms that problematic in quantitative
tcnns, for cxan1plc tnsui fictcnt (although potentially good quality) jobs, too few new
i nvcstmcnts and new finns.
The qualitative dimension has become increasingly important in recent years in
tanden1 with broader of local and regional development and following
concerns about the potentially damaging effects of weak and unsustamable fonns of
local and regional de\ elopn1cnt (Morgan 2004). Some studtcs have concentrated on
hi gh-productivity, high-cohesion fom1s of growth. while leaving other less desirable,
but widespread, types of growth under-researched (Sun ley 2000). At global lending insti-
tution the I M F in the mid-1990!:1. for example. the focus was shifted towards a partic-
ular kind of ' hi gh quality' econon1ic growth:
that is sustainable, brings lasting gains in employment and living standards
and reduces poverty. High quality growth should promote greater equity and
ua side In Newcastle upon Tyne In North East
Plate 2.4 Waterfront urban regeneration: the Q f.
England
Source: Photograph by Michelle Wood
(1 \I F 1Ql)5: cttcd rn C) phcr anJ Diet ; i(})
i 1
,
11
'h ...
1
.irt'ctl Ct)Jlltnl.'nt.tn { \ k \ ltch,ld 1996: ... and in tJ,,,
Hl)\\l'\t-r.:U11llltL l. ' "
\\,Ike l)ftht' \ sian fin.mcwl ':-.in th(' tht' tn ' ' htch such
, !'! ' t'tl practised b) uucrn.lttondl ithtttuti(.ms rctnmns open to question.
ln gr.lpplmg ,, ith rh, qu,liiratt' t' dtmctl'i(.)ll" of grO\\ th. 'high and "IO\\' roads to

111
J de' dopmcnt h ..l\ t' b 'en HkntHtt'd ( (\)ot. c 1995 Luria J 997). \
..
' \ plains. the 'h1gh road "tth qua]i tati \ d ) bcttt: r. rnorc .
ahl, ap
1
1ropriar" ton11s of cgwnal de' dopmt; nt. HO\\ C\ cr. \\hat i consid-
.. t .md .. 1 by pr: and ' al ue that - '' c suggcstec
,trc detcnnmt:d .n du1t.' ent r: .. and ti1nc periods. \Vhat con titutcs
or failed. .1:1d rcg1onal de,dopn1cnt in this contc'Xt "ill vary across
. p.lcl' and tunc.
t
Plate 2. 5 Maritime engineeri n .
East g m old Industrial real . .
ngland b' ons. shipyards on the Rl T l N rth
Source: Photograph b} Michelle \-\'ood ver yne n o
WHA r KI ND Or l
0 CAL A N 0 R t G I 0 N A L
Of 1/ELOPMENT?
Example 2.3 The 'high' and 'low'
regional of local and
1 he diffcn.: nt kind" of local and regional d, , .
1
, , C\ t: nptn!;!nt have b. .
and metaphors o l ht gh and ' low' rolds Th, d. . . ccn arttcutatcd in conceptions
. d . ' . e 1Stl n<.:t ton bet I
stnndutgs an potcnttal routes to 'dcvcloprn
1
f' ween t lese related under-
en ocuscs u h .
the nature of local and regional dcvcloprn t A. . . pon t e qualltattvc di mension of
. en cross mten l d .
ti v ity. \\ages, skdls, value-added and so ()tl _
1
,
1
. . e ate dtmens10ns - produc-
oca 1t1cs and
Jess ' hi gh road' strategic5 based upon hi (1h prod .. , . reglOns can pursue more or
o uctJ\tty, htgh wages h. h k'l l .
added or the converse ' low road' strategies b _ d : tg s ' s, htgh value-
. upon low p d .
skills, low 'alue-added Faced \Vith compctitio . ro u<.:tivtty. low wages. low
n Tom natton states . h Ch'
\\ ith lo\ver \\ ages and weaker reoulatory regim . b sue as ma and India
. . e es ut comparable skills d . d
many and rcgtons in the developed \VO ld . an pto uctlvtty,
r percet ve ' low
race to the bottotn' , through deregul ation and the weak . o . as a
, . b I . t . . . . . . enmo of soc tal protecti on mcom-
patt e \\ tt 1 matntat mng or trnprovmg hving standa d . d . . '
. ._ ' r s an social and economtc well-beino
and local and reg1ona1 development. For example r k h G .. . t::
. .
1
e ot er erman Lander wtth hioh
tnanufactunng dcnstttes, North Rhine-\Vcstphalia (NR \V) h . c
. . 1 as pursued a h1gh
strategy through substantial tnvcstrnent in technolooy-l d 1 d
, e c rcg10na m ustnal policy to
net\\ ork research and development (R&D) centres techno) t , r: .
. . . . ogy rans.tct mnovat1ve small
and tncdtum-sl!ed. enterpnses (SVlEs) and technology support institutions locally and
the regton. Close to 100.000 ne\\ jobs were created 1984 and. 1994
by thts strategy. n1any in environmental engineering. For NR\\. tow road' v.as not
pe.rceiYcd as. a sustainab!e option. although recent high unemployment across Germany has
rat sed qucst1ons about tts econon1ic and social model. EhC\\ here. discussions about the
offshore relocation of lo\v value. price sensit ive activities to IO\\ er cost regions in Europe
and beyond has protnpted concen1S about how localitie .. and might from ...... .....
tow to high' road de\ elopn1ent paths. llowcvcr. in recognisi ng the persistence of ba. ic
skills deficiencies among the workforce in \Vales. the \Vales Trades Union Congrt?ss (TUC)
has argued that:
The conventional response to this probletn [of offshore relocation] from the
\VDA [Welsh Devcloptnent Agency] and the [National] Assembly is to say that
Wales needs to move up tnarkef into the 'knowledge-dri,en economy'. But the
big question is how \Vales gets fron1 here to there when one in four of the \Velsh
....
population is functionally illiterate and two in five non-nun1erate?
(\Vales TUC n.d.: 4.1)
While offering a \vay of thinking about the issues and evident in international
strategic local and regional development policy. the 'high' and road distmctton
15
relatively simplistic. It may be better seen as a continuum. differing an_d between
different activities in different places and something which changes o:er_ ttme (high
1
.
0
":
low to high) with different expressions in different localities. DistingUJshmg high
d
1 nd peripheral locahttes and
an ow' roads ts also problemattc for developmg countnes a . . .
regions whose low wages and weak social protection may be perceived as compeutne
advantages within a globalising economy. C k (1995) Wale' TUC (n d)
Sources; oo e
-
.....
-- ----' J*
INTRODUCTIO
P
. les and values . . .
rtnclp .. r . gt\>up-.. dnd tnh.:t 111 pani c-
, t0 ho\\ -..pt t:' lL ,
Princ1rJc-. .wd n L
1
t' ulttH.: what ts dd1ncd and rnt:ant h\ lot: a I
, , 'f undct Jll( <II H.: I
ul'lr tktinc. Jnh.:rprc. . ,
1
r
1
.,nmarv dcnH.'nb ot lora nnct rcgH>nal
' , fhr tumhlrntnt,l o J
41nd rcgHuwl de\ dopmt:nt. .. ld , nHHJ-..h. -..hdh.'d wtth a dcgn:c ol
t ' , JJ 'Ctl\ ('I\ hl UJlcllll -
dcH:loprncnr t>t.: LO t.:. , t'Jtion"- b\ socm1 and tnkr
t ld dtftcnn<' mtt:rpl\.. ' .,
01 to contcs ar :::-, t. ,
1
he worth. and dppropriatcnc\s
. . b, place O\ t:r llllt:. . . .
...t, wtthm ,tnd t:t\\ , ..
1
, d .. , onnl dt'\ dopmcnt n1"l)' be arttculatcd
d
. tr t ot loccl an rLgt
of the crcn ' d. . . PrincJpJc-.. ttnd of locaJ and reg tonal de\ cl-
, b'". )fcohc 1on or J\ '"'
011
..
tht
0
Jnt. < , t concerned with ,n)uc,. and of \vhat
mcnt '"'u"c norrnatJ\ e ton . . . .
op l d b .
1
.. than what J"- Value arc 1n1phed tn thJnktng
ouc,ht to or c r,H lcr .
::: . . J
1
\\ hat could or -..houJd local and rcg1onal de\ elopmcnt mean?
about pnnc1pk::. ano va ue,. .

1 1
d r development d locality or reg ton need or want?
\Vhat -;ort or oca an t:'=' .
\\'hat kind' of de' elopmcnt are deemed appropnate and. as a consequence, tnappro-
, > \\ 'h t cor
1
trtute , rhc 'succe or tailure of a pectfic kind of de\ elopn1ent for
pr,ah.:. a
a JocaJity or regwn?
and values of local and regional devclopn1ent are socially determined
\\ ithin and regions. Principle might reflect universal beliefs held indepen-
dently of a country's le\ els of development such as democracy, equity, fairness, J iberty
and olidarity. The) often reflect the relations and balances of power between the agency
of th\! state. market. civil society and public. Pol itical S) stems and the government and
go'>emancc of local and regional development - discussed in Chapter 4 are central to
ho'' uch questions are framed. deli berated and resolved. The agency of state, market,
civil and publtc is not wholly autonomous or independent to act and decide its
own course of de\-elopment. however. Each is often circumscribed by the structural
context in \\hich it is embedded and the constraints this creates in any consideration of
what dcvclopmenf is. could or should be about.
For reasons wc shall di scuss in Chapter people and institutions within localities
and regions are free to choose their de\ elopmcnt paths and trajectories. Their
development asptrat10ns and strategies do not start with blank sheets of paper. The social
detennmatJOn of the pri 1 d
1
. ncrp es an va ues of local and regional development is a
geograpJucafl y unc\ en and hist . I .
.
0 1
, . . onca Parttcular constructions or noti ons of
eve opment condrtton the social f .
. . . . use o resources WJth potentia11y quite different implj -
cattons tn economte. social ecolo i l I ..
a 1 r h . g ca 'po ttl cal and cuJtural terms for example whether
oca Jty c oases an mtemaJ focus . . '
markets (WilJiams J
983
). upon social needs or an emphasis upon external
Different interest groups wiiJ often s k .
advantage often claimi . ee to mfluence the principles and values to their
..... , ng potential contribut' . ,
in or of localities and rego F . IOns to pan1cul ar notions of ' development
' ns. or mstance org . d I' b .
protection to enhance the
11
b . antse a our may lobby for greater social
. we - cmo of the I . .
atJons may dcm"nd more fl 'bl
1
, ob cmp oyed workforce while business associ-
CXJ e a our market t
environmental organisatio ...
1
s
0
Oster \.VCalth creation. Charities and
. ns may obby for h' 'h . .
regul atwns to encourage the , d'
1
g er envtronmental standards tn trade
upgra mg of ceo] . II
fhc state often h(tS to balance r d b' OgJCa Y damaging economic activities.
an ar ttrate bet\ .. h
vcen sue competing interests. Individuals
WHA1 KI!JO Of LOCAL
A r J 0 R E G I 0 . t A L I.J r v E L 0 p M EN T?
and insti tut ions with \ocial power and influ. . ., . .
. <.:nee Cdn seck to
1
h . . .
of' I neal and reg. tonal devcloptncnt but these
1
, b. mposc t etr spec1fic vas1ons
. . nay e contested an 1 . d
It is. then. a cntacal starting point to ask wh . . . c reststc (Harvey 2000).
. . ose pnnctplcs and v I , . b .
in local and rcgtonal dcvcloptncnt. a ucs arc cmg pursued
Linking to the discussion of geographical co b
nccpts a ove the social d t . .
of prin<.; iplcs and values has a space territory I . , , d : . c crmmatton
. . . . ' P ace an scale Part . I d' ,
and/or tnsttt utt ons may act 1n the interests of the , . , . tcu ar In lvtduals
. . . tr parttcular <,ociaJ class for exam le
capttal or labour, or their terntory, for example the
1

1
. . P
,,. oca tty, regton or nation (1
can work spaces and territory works within s , . ass
. . paces to provtde the bases for the
determtnatton and arttculatton of local and regional dev 1 . .
c opment pnnctples and values
(Beynon and Hudson 1 993 ). The principles and values th t h . .
. . . a s ape soctal asp1rat1ons
concemtng the dcs1red k1nd of local and regional develop t d d
. . . . men eemc valuable and
appropnate part1cular locahttcs and regions arc geographically differentiated and
change over ttme. They may reflect perceived economic social and P 1
1
1
. . 0 I lCa lnJUStlCCS,
for example regardtng the allocation of public the actions of local or trans-
national firms, ecological damage or the relative degree of political autonomv. oc-..elo _
ment' may then mean a 'fairer' allocation of public funding, greater
over fi rms, enhanced environmental standards and protection and further political powers
and responsibil ities.
The attributes and characteri stics of places influence the collectively held and artic-
ulated princi ples and values reflected- to greater or lesser degrees- in local and regional
development. Socia] aspirations for development and what can, can't or could be
achieved are geographica11y rooted and conditioned by past experience and assessments
of local assets and networks. Geographicall y embedded principles and values have
material infl uences upon the kind of local and regional development considered desir-
able, feasibl e or possible in parti cular localities and regions. Example 2.4 explores the
particular principl es and values of associati ve or cooperati ve rather than individualistic
entrcpreneuriali stn in Wales. Put simply, place n1atters for the principles and values
of locaJ and regional development. Indeed. as we discussed in Chapter l . the need for
tnorc context-sensiti ve policy that acknowledges the imponance of principles and
values in pl ace has been recognised (Storper 1997 ). This theme will be explored in more
1 d P rt IV Integrated
detail in Part IJI, ' Interventions: mstruments and po 1c1es an a ' ....
approaches .
Although it has been the subj ect of the conceptual and theoretical dtscussed
. . . . h fi s a highly stgmficant recent
further 111 Chapter 3, sustaJnabl11ty has come to t e ore a_ ..... .. ,
. net pies and values of local and
influence upon the definitions. geographieS: vanettes. pn , .
. 1999 Haughton and Counsell 2004.
regional development (Geddes and Newman t'l ..
1
, (l
1
nd purposes o oc,l an
Morgan 2004 ). Sustainability questions the fundanlenta a d .. d . bTty
. . ononltC growth. an lb ura 1 I
regional developtnent. particularly ItS focus upon ec . , . . .
1
ecolovical.
. . . S . . , bilitv has economtc. socla . :=-
longevity and longer-term tmphcattons. ustama J . . , t-Ied era recent
t t to an earlier envJronmcn ,
political and cultural dimensions. In con ras . . hes to integrate rather
h
ught hohst1c approac
versions of sustainable developn1ent ave so . d E nple 2 5 sn1art
lly as dtscusse In xat '
than trade-off these specific facets. lntematt?na
1
. s a means of simultant!-
. N rth Amenca and Austra ta a
growth' has been promoted tn o .
1
. In the European Uni on too.
. I d nvtronmenta aims.
ously achieving economic, socia an e
-_415

1 NT R 0 0 U.-=' C_T_I
Example 2.4
Principles and values of associative
entrepreneurialism in Wales

1
.. o " Jl(l h n', indu-.tr .al IH.'. t: tland or -.outh has undcroone
The oar-mnun=- .. . . . "
d
.. . tllrotJ<"Yhout th""' l\\ nd rh l:.L'onon11C and S1..H:ral re\'Cnert
r,,c =- . " "' -
. h ,
1
rr ..rlt tntJ .,,
111
...-11 td""' r'")r lo al and rcetonnl lk' dopn1cnt. I he cmt)l' 'l
1
!tOll aH' < 1 '' "' - r u' '
t
. r .,.. lnd
11
, ..,, t
1
nn Jt)I1lHHIOI1 Ius prO\ ed a ratlurc. ho'' C\ cr. \\ale" sttll
tlp<m en ., p >< . - . _ >
rd.lii\C w rh orbcr nar.ion'. nc:,.:gwn; mthc Unncd Kmgdom. In 200l.
\\
1
al u. :ddcd ta.x (\'AT, r.:,; 1 ,r: .1110n rare 101 nell hu ''a" the 'econd 1
011
est
nauonaiiy at 26 p. r 10.000 ',:e-rn adult . ' r ttlauon compared to 3 7 for the u n ned
:gdom '' J "hole (Oflk for l>;ational t<Jt ,u,, 2004). Moll} Scott Cato argues thm
1
n parti ular fonn of an indi1 idua. : _. an,l ,_. ,:,en i ng mode I of enterprise and entre-
pren-uriJll m j.:- with th prindpl and 'alu s of \Vd,h society. The part1cular ,e
1
of
\\ .1rc upon connnunit .. tnutual . .ud and solidarity. These ')it
un.:J"Iy 11 1th hero1c indil id1mlt n1 and entrepreneurial ism that are claimed
to pro\lde the nami m and fiexlblill) of the Anglo-American economic model. In partic-
ular. the hbroncJ!ly embed Jed anti path) to\\ arJ ... the nco-colonialistn of the n1ainly Eng I ish
coal O\\ ncr dunng the dominanc of traditional indu trv in \\'elsh econon
1
)' and '"".
, . . - . . . . . SOCiety
madt: pnvate enterpn. e nonymou' wtth pubhc explottatton for many in \Va1es For
lhe \\ cl h people:
Rather than -eeing both priYate and public employment as equally legitimate
there ha:- been a popular tendency to equate e::;teem and \VOrth \Vith
the (ommnnity ... This nla) be as the result of the predom-
mance of an rather than a value S\ stem.
(Ca:-on et al. 1994: 15. quoted in 2004: 228)
Tite efforts of variou public in seeki o . .
Anglo-American mod'"'l . . . n::- lO pron1ote \Velsh enterpn e the
.... c are a mappro . t d d e
Cato aroue that a part" I pna c an oomed to failure. Instead. Molly
. lCU ar onn of asso<.:iative 0 . .
\\ 1th the gram of \ret h p .
1
. r cooperatt\ e entrepreneurship e:oes
f
.... nnctp and and mo l'k 1 . . V'
o the employee-owned cooper t. T . re t e y to succeed. ctttng the case
a t\e ower Coli
Wales Valle' . Thi partie I r. lery m Hrwaun. Glamorean. in the South
- . u ar orm of local and r"'o. , 1 d , l . ._ . .
more appropnate fir
11
ith \\' I- h . . a e\ e opment IS mterpreted as a
c - . I . l: pnnctples and \ alue \Vh h . . .
an ate h1gher level of b . . et er th1s tnnovatl\"C approach
new usme s start . . \1.1
-ups 10 '"ales remains to be ecn.
Source: Cato (2004)
the European Spatial De' elo .
spatial d 1 pment Perspectt\ e att
eve opment framework for th h . erupts to promote a more integrated
and re 1 e w ole o t t h E
concJ e the sotnetimes cont , d' . e uropean territory and to balance
n1cnt (Fio ? 1) . ra tctory mterests f . .
cure- . Questtons of social . _ .
0
economy. soc1ety and envtron-
opment h I b JUStiCe and eq r . . ale een addressed
100
,.. ua Il les m local and reoional devel-
2000) Or example in . . "' gender-sensttl\ e approaches ( Rees
WHAT KI ND
OF L OCAL AND
REGIONAL DEVELOPMENT?
Example 2.5 'Smart growth' and I
development ocal and regional
The quest for !:iUStainab1c and 'live bl .
. . I , . 1 . I , d . a c communities h .
appl oac to oca ,m rcg10nal dcvel as stimulated sm , opment. e pcciall .
1
art growth
Current patterns of urban and suburb d Y tn North America and A
1
.
. . an evc\opmcnt ,.. . ustra ta.
quality of hie. Urban sprawl and inner cit . mrcrpreted as detrime tal
I
. Y populatton ftight h n to
the geography of pubhc ser. icc provision . ave fostered concern abo
1
. d . . . , particularly how . u
can be tun ed and supported
1
n the conte t f . mner and outer cit)/ serv
. . x o suburbani f . . . ICC
the growtng bet\veen where peo ) , k a lOn and shtftmg tax bases. and
. . P e \\Or from whcr" 1 .
tificd mclude congestiOn and pollution fro . . peop e hve. Problems iden-
m automobtle depend
1
pre; ure upon public infrastructure and se , . . ence. oss of open space.
rc and the loss of the sense of com n mcqmtab\e distribution of economic
munttv.
Local and regional development has a rol . k. e ln ma mo communf .
sen c the of who live and \\'Ork , .. th' h e
1
tes more uccessfu\h
Nl m t em' (L l G
Ahwahnee Principles. p. l ). The Local Govern C . O\:emment Commission,
d
. . S G . ment ommtsston tn America has de\ el
ope 1ts n1art ro\vth: Economic De' elopment [i h 11 . -
f
. . . or t e - st Centurv based u
a o pnnc1ples 1nfom1ed b) sustainabilitv Th . " '"' pon . e argument ts that:
\Ve can no longer afford to waste our resources. whether financial t 1
h p . , na ura or
uman. rospenty 1n the 21st Century will be based on cr-oat d . mg an mamtamm!!
a standard of living and a hioh qualitv of t1re t'o 1 T h:- ..... ::: Jl r at . o meet t ts
challenge. a comprehensive new model is emerging for smart Qrowth \\ hich
recognize" the economic value of natural and human capilal. eco-
nomic, and environmental responsibility, this approach focu es the
n1ost critical building blocks for the community and the region. It
emphasizes community-wide and reg10nal collaboration for building
and livable places. \Vhile each community and region has unique challenges and
opportunities. the following common principles should guide an integrated
approach by all sectors to promoting economic vitality within their commun-
ities. and in partnership with their neighbours in rhe larger region: integrated
approach, 'is ion and inclusion. poverty reduction. local focus. industry
wired communities. long-term investment. human investment. environmental
responsibilit) . corporate responsibility. compact development. livable commun-
ities. center focus. distinctive communities and regional collaboration.
Element of this acrenda have been adapted by particular .tates and citie- in North merica.
including :\orth s smart Growth Alliance'. Greater Bo,ron. Baltimore and
Portland, and in f\ustralia: including Quet:n ldnd. .
Sources: Local Government Commission. Smart Gro\\1h: Econonuc
Development for rhe 2151 Century. "ww.lgc.org economic localecon.html:
HauQhton and Counsell (2004)
....
I TROOUCTfO
socwty
SU!itCliOat>'O spatial
oevefopmem
'=----
Envronmern J
Figure 2.1 European Spatial Dovolopment Porspect/v(j
bOVrcc; M p-1 d twm Europe r COmm an (1999J
J;iffcrent of local and regional development are doscJy (;Onnccted to s(JctaJiy
determined principle and values that c'm di ffcr from place to place and change over
time. can be made between varieties of local and regional dcvcloprncnt,
including hight and 'low' road and ht-. quantitative extent and qualitati ve char-
acter. r;rincipJcs and value shape how groups and interests in pctrticular
dc1inc and articulate what i meant by Joca1 and regional development. ' J hey
bhape the normative que tion about the perceived worth and desirability of its different
varictic . Different degree of commitment to social justice and cquali-
in more and antcgmtcd fonn& uf local and rcg;<maJ development may emerge
in different e:snd change over time. 1 he kinds, principles and values of local and
regional development can have very different implications ec<,nomicr.tlly. social1y,
environmentally, politically and cuhurc.lly f(,r different social groups and plw.:cs in
and
Local and regional development for whom?
l >ctinitit,ns and kinds of lo J ' 1 1
. . ca dnu rcgwna c cvcll,ptncnt arc c)of.;ely (;onnccted to qucs-
twu of Jc;caJ 'md rct'ionCJI dcvc1 f' l
oprncnt or w lorn' Answers to question concern,
hrst, the ohJccts and f 1 , I . .
r. . . J o oca and rcg1onal de ;cJopmcnt a no second the soc tal
wclrarc of the h. ' '
f
,
1
I
0
en uneven and di ffcrcnti rttcd distrihution
o o .md where: bcncht ' HHJ lq .
. ' 1\Cb rum rart1cular v;arictics of local auc.J rcJdomd devel-
opment. Spccthc ocJal gtt1uns In 11 .
1
, f . ,. ( or mstttuttonal mterestti may he hy parti C-
u ,tr orm' of I(H:al 4Jnd rC''lf>ntl d v I ' I
.1
1
I 0 '- c c opncttL I l tt;h ) (,,. tlJ'N' r<>ad stnttcgic,.; rnay favour
Cll vr d{ V!.Hltttgc r,pcclflc OCIUI 'f I . .
JtJc ., 1
1
g (up 'occupatH,tt-.. frrrrts, and local-
, lJ '"' c;u,ns. or example JH .,
1
'
Jnc
1
t I ' l J1c r
1
y .. c<.l tnay propcn y develop
' t:< H'nflW
11
C ;.mel Chtatc . I
pccu tltors at the c>J .. tirnc IJOU'H.! huycrh
H AT V. D 0 F l 0 C I l I
I ' EGIO Al DE ELOF llE l"
and local cornmunit1cs. Lnderstanding an-' e
1
.
:.
u ');P ammg the ob' b'
welfare outcomes arc central to 1oca1 and reg
1
d ' ru and soc1al
. . Jona cvelopment
rhc ObJCCtS Of local and rCgJona\ devcl<l"m. (' .
,. cnt reacr to the m' tc 1 h'
'dcvcJf,pmcnt' action is directed and the sub , a na t JO" to wh1ch
arc the themes a d
development' is based. the cb' . ,.. . . n upon wh1ch
. . . , and 15 an
1
, ,
point m thmkJng through the effects and , f' . .
c ns o spec1hc dehntt1on 1
and values of local and regional de tCl()pment d
1
. . s, pnncJp es
. . . 0,7ses an po tc1es. 1 able 2 5 prov d .
exam pi<.;, of the d1 f fcr'-=nt and fi()ntetimcs ovcr1appin
1
.
1
, d
1
cs
. g eve s an scales for the obic :t
and subJr;r ... o1 I( '(.:a I and rcgt()nal dcvel()pmcnt. s
A range of pohcy mstrumcnts can be dcsi,mcd to
1
'ntcrvr. . . d h h
. o- an s ape t c extent and
nature of local and rcg.Hmal development. The different fonns and ' bl
1
0
r bl "" ,
1
. . poss1 c examples
arc dcta1 e u1 a c L r, I o K'Y mstrumcnts can be coordinated and te d h'
I m grate w1t tn
' t vc1opmcn_t for localities and rcgjons. policy
have a1ms and both intended and unintended consequences.
'J he mterrclattons and '.ptJJovers be-tween polit-y areas can cause either negati ve or posi-
ti ve consequences, and knock-on effects. They require careful deliberation in the
problctn definition, P(Jiicy design and delivery stages of the policy cycle. 1 he transla-
tion of the objects and subjects <)f local and regional development into policy interven-
tions can usefully distinguish between those with an explicitly spatial focus and those
without but 'Nith spatial impacts. For example, area-based regeneration partnershiph arc
ex rticitJy '>patial. ' I heir <,hjcct.s arc specific types of places and their subject is economic
and social wcJJ-b<:mg in particular kinds of neighbourhood or community. Thi!, spatial
p(>)icy intcrvcnuon seeks a spatial outcome. Whereas individuals or households may be
the objects ()f poJicy changes in the tax and benefits system whose subject might be
wcJHuc refonn and public expenditure efficiency. J fowever, this poJicy may influence
disposable incomes and expenditure patterns in the local economy. A non-spatial policy
Table 2.5 The objects and subjects of local and regional developm_e_n_t ______ _
tr;vol I ':,cafe
Objccts _____ __________ _ _
lndiliduals
Household'.1
Farn1Jies
Education
'.Jome(,art: st3r' t:;es
serPces

ar1d
t
1
r.:
1
ghr)ourr oorJ renewal
mumty regtneratiCJn
Rural di 1ers,f cation
Strateg1c oc,rtnershlpS
MarV.e tO'I;n revival
Growth strateg' es
l r;calities
1 01/flS
C 1 t tregions
Local authom; crJ 1aborat1on
Spatial strategtf;S
Sub rcg1ons Peglor a
13
conomic sttategles
r c;norr c aevf:lopment strCjtegJes
Sub nations t
Reg,onat c
rJatlonCJ Economic and social cohe..,Jon
tAat:.m rr:g,ons /l :d distribution
lntE:rnatf()nal
1
JibBralisation
------ -
-
-
50
1 NT R 0 DUCT I 0
. . t for local and regional de_v_e_lo_p_m_e_n_t _________ __
Table 2.6 Poltcy mstrumen s
- "<amples
Forms
Direct intervention
Direct provision of services .
Commissioning of services from publrc.
private andjor voluntary sectors
Economic instruments
Taxes
Charges
Subsidies. tax credits and vouchers
Benefits and grants
Tradeable permits and quotas
Award and auctioning of franchises and
licenses
Government loans. loan guarantees and
insurance
Regulation and other legislation
Price and market structure regulation
Production and consumption regulation
Standards setting regulation
Prescription and prohibition legislation
Rights and representation legislation
or regulation
Information, educatron and advice
Provision of information
Public education campaigns
Reporting and disclosure requirements
labelling
Advisory services
Representation services
Self-regulation
Voluntary agreements
Codes of practice
Co-regulation
Education. health
Employment zones. subsidised public
transport services
Fuel duty, VAT. development or roof tax
congestion charges. road pncmg
R&D tax credits. preschool educat1on
vouchers
Social transfer payments. educat1on
maintenance grants
Carbon emiss1ons tradmg scheme
Mobile phones, a1rport landing slots,
broadcasting
Student loans. Soc1al Fund, export credit
guarantee
Competition legislation, price regulation,
pnvatised utilittes
Planning rules, public service obligations on
privatised utilities, renewable energy
obligations. ltcensing
Accreditation for education and tra1nmg
qualifications, trading standards
Cnminal JUStice
Human nghts, freedom of mformation
On-line services, leaflets, multi-language
information, information access for disabled
Health. education
Frnancial services, public appointments
Food and drink ingredients, household
products
Careers services, m1cro- and small business
advice institutions
Ombudsmen, area forums
Advertising standards, corporate soc1al
responsibility initiatives
Banking Code
Industrial relations and dispute resolut1on
institutions
Source: Adapted from Pnme: Mintste S
r s trategy Unit 12004)
-
....--
WHA1 VltiD Or L OCt l AI()
REGIONAL DEVELOP 11 ENT?
then, distinct efT .
1
-:. .
. ccts. rom ttm . t . .
intervention can cm<.:rgc as the focus of
1
.,
1
, . e
0
tJme. spec1fic scales of policy
. . . <>c<t dnO regtonal d :> I .
of the problems of spe f eve opmcnt g1ven particul ar
CJ IC types of , . , fi .
Econornic D<;vclopmcnt (( t:D) (Exampl.
2
( . aJea. or mstancc Community
c ) ) and the m .
ore recent focus upon neigh-
The ..,ocial welfare dJstribut1on of who a d t
n WKrc benefits and 1
varieties of local and regional development oscs
1
rom particular
geographically
over ti1nc. In terms, iti . . . . crenttatcd anti changes
' C!-> Jn econom1c and so , 1 . d ..
inherent tn the con1b1ncd and uneven devclopm , t . h. . . cJa con 1t10ns arc
en wJt m capltahsm 'ts , . .
system ((jla5meicr 2000). Inequalit ies exist be;t . . h . ' a soclo-cconomtc
ween t c 1mpacts and e f
socio-ccono1nic by particular social groups [1 d . xpencnces o
.
0
ten cpcndmg upon their I
cthnJcJty, gender and identity. The distributio f ,
1
c ass,
. n socJa power and resources
w1th1n shapes who and where gains from local and . ,
1
d
. . . . reg10na evelopment ( llarvcv
1982). Wtth1n capttahsm. a recurrent and nonnative issue r
0
1 . 1 d "

11
r oca an reg10nal devcl-
opn1cnt concerns the soctal welfare Implications of the relatJ.onsh b
. . tp ctwcen cconomtc
effi ciency and growth and soc1al equity (Bluestone and J Iarrison 2fJ(J() s . tt . d s
. , .. co an torper
2003 ). Arc they contrad1ctory or complementary and to what degree is each consioercd
desirable and/or appropriate for local and regional development?
Historicall y, Kuznets' ( J 960) nationally focused work argued that further economic
growth tended to create more inequality at low income levels. Richardson { 1 CJ'9 J
concurred and argued that regional inequalities may only be a problem in the early stages
Example 2.6 Community Economic Development
In response to the inadequacies of the kinds of 'top-dO\\'Jl' state-Jed approaches to Jocal
and regional dcvcloptnent outlined in Chapter 1 during the 1960s and 1970s, community-
focused economic development emerged where neither the private nor public sectors had
managed to <Hncl iorate persistent deprivation or had struggled to provide services to 'hard
to reach' social groups and Community Economic Development is
approach characterised by comtnunity-Jcd and determined regeneration. Ctvd
th key del ivcrcr of commumty
through the voluntary and commumty sector ts seen as e . .
. , . . all\' local authonty orgamsa-
scrvtccs as a not-for-profit non-tnarkct and non-state. espcct . ' .
. . . . . b d t , d market constitute a 'soctal
t1on. So-caJJcd "Third' sector J01tJat1ves cyan sta e an
f 1
,
1
nd regional development and
economy' and increasi ngly signifi cant components o oca a . .
. . , dit unions mtennedtate labour
policy. They may include cooperatives, soctal enterpnse, ere . ' . . . h
1
_ ort for mformaJ actJVItiCS sue
markets, Local Exchange Trading Schcn1es (LETS) anc . . . . k
1
. . cl" , d ' taged locahttes smce tt see s o
as volunteering. CEO is potentially bcnefictal for tsa 'an h h the Jocal
. I' tc local rt:sources t roug
usc and develop the skill s of local people, recJrcu a . . .
1
,
1
communities. The
If dctcrmmatton m oca
economy through local ownership and
1
ostcr se - . . t xt of internal and
. . . . , n lim1ted by tts con c
potentta) for CEO \Vhilc sJgnJfi cant may rcmal . bJ onle \''cak education
f 1 ca 1 dtsposa e Jn(; ' '
external constraints, for example low levels
0 0

and skills locally and barriers to existing market entry.
1
(
19
99) An
1
in eta/. (2002)
19
99) Jl augmon '
Sources: Geddes and Newman ( :
l U
-
Sl _ ...... . --=
INTRODUCTION . . ..
.
1

1
incrc,tscd, a cntJCHJ of IIICutnc

1110
kvcls per c npt ' . .
of a nati,m's gn '' rh. As nco . I f higher HVt:n&gc pel' l:apl tH lll..:onl c fl!ndcd
' r. I . ccnrwmrc growl J diH . . ,
j rench d nnd ,ur1JCr . . alit)' J<jfTUJc 2.2 dcp1cts the l'clattotlslup iu
. . ( vcntll lfi COIIlC IIH.:qu, o . . .
ll> rt'duc ,, uarwn s > J{ . ,
1
. rclson l J 97')) saw c uupntJbdJt y hetwcc11
. .
1
d () hyptttfiCSIS. IC lei
Kuzncts ,n,cr c . t . ... , . JH,t cnti ully reinforced thJuugh st rong and rcdis-
"' . , and eqUJlV 0 Jfl.!CIJH.:
rcgionnl .. . : ,
111
debate cmcap ulatc the 'knife-edge' dilemma
tributi' c n:gwnnl Rc:cc

gro'' rh nnd equ1ty:

..
1
II tl "I d vcloJ)lllCill policy is on ptoductivity
solllc annlv!'itS tn < let c . . .
' . c 'l""IL,mcmtions (thereby maxuntstng nat tonal growth
llllJ'H>VCJllCfl(!'i 10 u) tUlll11 'oo . . .
. c' l t nsion ) while other analysts suggl;st that ltmtt -
r,Jk!'i but HlCreastng so tu ., ,. . . . . .
. .
1
. 1 . 1 ,
1
,
1
'lroJni'ttc form of tucornc dtstnbutton (soctal and/or
mg u1cqua tty t 11oug t a '
I) Jc d to more , iablc long-run dcvdopmcnt pro gnu 11n1es.
tllter-regJOna can ,l '
(Scott and Storpcr /003: 5XX)
rrowt h and equity considerations remain a central and in constant tension for local
and regional development.
C11ohally. a compari on of the relative lcvds of prosperity (ml,;asurl,;d in ( Jf)J> per
capita) and income inequality (mea urcd by the GJNf cocfficjcnt - tht;:; nttio or income
of' the richest 20 per cent of income earners to the income of the poorest 20 per cent
varies 0 and I. value closer to I mean greater incoml; valw.:s closer
to 0 wean less income inequality) reveals a markt:dly uneven piL:turc (Figttrl; 2.3). At
the nati mal leveL many higher-income countries arc grouped around relatively simi lar
income distribution . Japan more equal and the United States nHH<..: unequal
stand out. Lower-income countrie vary across the rang(o: frorn the fonucr centrally
planned economic (('Pl.:.) countries in huropc (e.g. Poland, Ronwnia und Uk raine} with
compnwhlc anJ higher level .. of income equality to lnwl;r incornc countries with hi ghly
unequal incmnc distributions (e.g. Bra; d. Coi(Jtnbia). Similarly as an of li ving
Inequality
Income
Figure 2.2 The Kuznets lnverted-U hypothesi
Sourco: 1\{JQptucJ from Cypher rtni.J Dt01L (2004: 54) s
W II 1\ I I r ll) 0 r l ( J C p L A f J[) fJ E G I 0 r
'-l AL DEVELOPMENT?
I ty <1 .'1
Moro oqu
1
GINI
lndOX
4()
1.0
0.5
oqll<Jhty OJ>
5 10 i!J :>o
Fronco. 11;=
fill Au rruw
Gf.>tmar 'I
25 30
GOP Per Cn1 .ta, USSOOQt200Z)
35
Figure 2.3 Average prosperity and equality of distribution by countryt
2002
Sourr .. c: Institute for Competittveness and Prospenty (?.005: 10)
$40
standard"> and well-being, cotnparisons of age-adjusted mortality ratc
5
exhibit lar 'C
regional di ffcrenccs within countril,;S. particularly in the United States, Australia
Canada, compared to the much lower variations in Japan. the Netherlands and Portugal
( F i g u rl; 2 .4).
In the huropcan Union, discussion has the tradc-offs between e<.:onomic
effi ciency, rights and territorial cohesion. ( ohesion is seen as a 'dvnamic' and
"
concept defined as 'the political tolerability of the levds of economic and
social di sparity that exist and are cxpcl;tcd in the European Union and of the measures
that in place to deal with them' (Mayes 199): I). The issue has focused upon whether
progress greater economic efficiency. for example through the Single European
0.25
0.2
0. 1
0
l
- fll
m
"0 >-
'2
'U nS
-g 1 ,.. Q)

(1)
"'
c:
!3
0 :::;...
() c: (ij
:;)
ro r1 0 0 E
>
"&;
I'll :r d nS
Ill Q) '(il
fa
- c: - t: 1.:: 0 .0
"'
0

1:
.,
... (.)
.2 ..!_
s
Ol [I! e :3
c:
0
en en
w
0. c ;; a.
-
c };!I (/}
"
u. - a.
-
::l C/)
(f) M 0 :;: Q) Q) z
J:
Q)
<(
(.) m <!>
cr z
t:
c:
::>
&]
ad'usted mottallty rates by country.
Coefficient of regional variation of age 'J
Figure 2.4
2000
Source: Adupte<.J trorn (2005b: 150)
: 53
- -
INTRODUCTION
tl
, ... uro wd the C'\tcnsion of social right,, for C\.atnpk
d h
...
1
nk currcrlC\ lt: t: ' . ,
i\larket an t t: = .
1
t. n wiJJ be made or rradcd-off [lt the C\.pcn"e 0
rkim! umc rcgu a to . . 1
through the \\ O . - . . ,
1
c thC ot the l IHOtl. l t gurc I .::
. d ocJal dCrt ._ . . . ._ - '
t.'conomrc an f'&'. .
1
d The t:'\tcnt to whtch soctal cohcston 1s a result or
i l ftp .. tratc the tradc-o lll' o 'c . , 0 )
f
. nlJc orowth remain.; dcbatc:tblc .. 0 4 .
cause o ccono ) d I i I
' . f J b oadcned dcf1nitwns ot Joca an rcglona ( C\ c opn1cnt, social
In panllcl Wit 1 t lC r c .
, ' . h dd ... cd questions of equallt). Recent research has focused upon
welfare analysiS as a rc . . . . d h .
. . . f th experience and parttctpatton of'' on1cn an Ov\ this could
111
ake
the uttlrsatwn o e . . .
I
. d fi rons principle and \ ancttes of local and reg1onal development
the under ymg e J1l
1
.
d
. r
1
e (E"'ampJc ? 7) Stmt1arl}. the contnbutton of Black and Mtnontv
more gen 1 \ .... ;
Ethnic communities in haping to local and regtonal de\ e1opment has beer
critical
1
n tackling di. crin
1
ination. promoting posith e role models. rai ing educational
a. P' rations and i ncreas1ng economic part ici pati on (Ram and Small bone 2 00 3). The \\a ys
111
\\ hich concept and thcoric of local and regional developn1cnt seek to understand
and e\plain uch dilemmas and broader for recognition. the role of markets and
tates and public polic) intcn entions to shape \Vho and \\'here gains and loses are
addre sed in 3 and 4.
\Vc have uggested in this chapter that the social definition and the geographies of
space, tcrritot). place and matter to who and \Vhere is advantaged or disadvan-
taged in particular fonns of local and regional developn1ent. The variety of local and
regional development pursued and its underlying and values condition its
C\tcnt and nature. The objects. subject and social \velfare aspirations of local and
regional deYelopment result from answer to the question of local and regional de\ el-
opment for whom? The answers are geographically differentiated and change O\ er tirne.
'
'
'
Cohesion
'
'
'
'
'
Efficiency
' 0
'
'
'
'
'
/
/
/
/
/
/
/
/
/
/
/
/
/
/
Rights
Figure 2.5 Trade-offs between cohesion .
Source: AdaPted from Mayes (1995: 2 3) , efficiency and rights
KIND OF LOCAL ANO
. . - REGIONAL DEVELOPMENT?
l or sornc localtllcs and the social\ -
d th l f 1 dctcnnmed a
crattc an c rcsu t o mdt\ idual and
1
mav be pureh
. . C\.pl . . nlento-
tun tty provtdcd by con1pctiti\ e tn the o ottation of the equality of oppor-
conte\.t with . .
mmtmal :state and
Example 2.7 Gender-sensitive regional d
evelopment
won1cn should be identified as a potential for r'o
1
d
. . cbtona e\ elopment a d
in the rcg10nal policy process (Aufhauscr et of.
2003
:
17
). n a' capable actor:
Traditional fotms of reg1onal polic) have often b bl.
cen md to the parti - 1 .
participation of \VOn1en. Despite the tnark.ed oendcr , , . < cu at mtcrcsb and
o \.: tects ot reo tonal ceo
1
.
restructuring and the increasing rcle\ a nee of \\hat "' o
1
omtc ant
< \\ere tOrmerl) reoardcd , ' .
issues (e.g. chtldcare, \\ ork life balance) in local and o.
1
d o \\omen s
. . . . rebtona e' elopmcnt. the potential
contnbutton of\\ omen retnatns undervalued \Von1en rem d
. . . . . . . am un m public
espec1ally tn sen1or dec1ston-makino roles Regional 1
1 . . . . o po tete.;; 1ave tended to utilise
hi ghly s1n1pltfied tmages of \\'Omen that fail: to do Justice to tl
1
, d
. . , , 1e actua an mcrcJ .... tng
, anety of fctnale In es (p. 6 ). The de\ clopment potential ot' \\ 0 .....
. . . men s part1ctpat10n m
cconon11C,. soctal. and cultural ten11s and the relevance. efficiency
and effectiveness of reg1onal pohcy are inhibited as a rc5uit.
As part of raising a\vareness and gender con1petence . Aufhauscr eta/. (2003)
have deYeloped fundatncntal principles of gender-scnsiti\ e regional de\ clopmcnf . They
seek to adapt and broaden regional policy to ensure heightened gender m' arc-
ness. For Aufhauser et a/.:
'Gender-sensitive regional de\ eloptnent' n1ay be understood as a concept for the
design of spatial deYelopment aimed at bringing about the
encc of 'von1en and n1en on an equal footing and in particular at contributing
tO\\'<.lrds the i1npro\ etnent of the possibilities of female self-determination and
participation.
(Aufhauser eta!. 2003: 3)
The principles include: enabli ng won1en and men to choose self-determined lite con:cpls
1 t f cndcr
and hfcstylcs, challenging gender stereotypes. ta"mg accoun o g -. .
. d approach "S wtth heu!htcntd
mequahty structures 1n poli cy design. developtng mtcgrate L: ..... "'
r: . . in the reg10nal de\ clopmt:nt
gender and pron1oting \\ on1en as op1nton 101 rners -
process. .
. . . d 1 d mainstrcaming' gendl'r
1

Practtcal tncasures to tmpletncnt thts agen a me u e b
.
1
1 .. , dcsiCTn and de' clopment )
across reoional public poli cy encouragmg rcgJOna po o h. 'th
. . tl ... EU's EQUAL partners tp ''I
for and \Vtth \von1en' (for exarnple. by butldlllg upon lt.: . . F t r
. . . . 1 in the rclc\ ant u u c;
a gender focus) and facilitating \VOtl1Cll S patilClp
4
ltlOI . , ( f gcndt. r-
d
. d tlthouoh tOll o
eveloptnents seck to n1akc progress on thts agcn a,_' o ..
1
,
1
, by the
. . .. 11 , sull not rcgall c t ,1:-- 1
sensntve measures and instrun1ents arc t) ptccl )
predominantly n1ale actors in locaJ and regional PL)licy. Authauscr ct a/. (200 )
16 i
' ' '
Conclusion
. ,
1
. '"""' i an engagen1ent with it most
U ag lo a ..Ult . .:::-- , l . .
n . "'l'
1
t- \_r "1J Ul a nomlatl\C \\hat tt hould be Jre
'"' ') iHl'r' \\nat 1 . \\ IHll
..... ' ..... . . : . 'IHlf1t'r a ..:ddr' ". ed the fundan1ental que tion of \\ tlat
'fi{t ' .-1. .. . \. . ") . . .
. ,
1
, ..: e .. _, ... , .... .,r''"'l-""'1 and tor \\ hoTn. of definttton were
I ') )t {"- 1'1' r t. I h> U 1.. , " ' " '- .. '
l' l r a. ' . "' . - .
d '11
1
,
11
;\,lla '"'l':)n "'local and re2ional dc\elopment. it historical
r .. , : "\\ .. to .. 1 11 ". ... . . . a . _
d
.. :. n
1
rJc)rt},_,...... C)t. ,: of terri ton. place and 'ca e.
an . t -.4 .... .. = . .
D
... ,nl -
0
1'l- ,t-1"-'"1. -..... . ,T,onal hn\e broadened to include cconotnic and
t.l ll ,,, \.; \.......... . . .:- '
"n' ironmrntal. pol Hi al anJ '1ltur.1i Definition, are ocially deteunined
in th" of endunng thc111e_. principles and values, incorporating
g. o_;rJphrcal tii\ anJ ch .. 0\ er titne. The historical e\ olution of de\ elopn1enf
m lht' P'-' r-w& rc;10J cmph ..6i ..;e. 1ts changing meanings. geographical different1ation.
br .1\.kned t'l'l'u Jnd ...pprC\k tv lo al ..md regional de\ clopn1cnt. Geograph) matters
.L .1 \.'.lLbJi factor in l alan clopment. Territorie- e\ oh c a defined areas
m '' h1 h pJ.;;icu'ar definitil'll l'i lo al and regional de' elopment are con tntcted and
...... shJpe the geographl(Jl Ji, und une' of local and regional
d Ec0nomi . _ "''-'i,lL I ohucaL en\ ironn1cmal and t:ulrura) proce :nftu-
n e lcrl'ai and ck,pm\?nt acr0::'. bet,vecn and through different cales.
The HHietie- Jnd principk _ Jnd 'alucs m ditl'erenr and tin1e period ,, ere tile"'
xplored. \."f locat and regional deYeJopn1ent connect to deter-
mined and ncnnmi' e Jnd 'alue.-. rna) differ geographically and change
t."\ time. Distinguishing the objecc .. ubjecL and :;ocial welfare a pect of local and
' ' '
ue\ under tJnd the often and geographicall) une' en
u I. ot " ho and benefit ... t>r lo:es from panicular fon11 of loca1 and
r gtonal de,elopment. The ne\t chapter build5 upon the of what kind of loca:
r i01al
1
"H t d f h
::: u .... en an or " om. and \\-ith the concepb and
th t k to lucal and regional de' elopment.
Further reading
For the more international undon ta d' f 1 .. t>
!"0 t: n o and regmnal deYelopment
ott.. an_d. .... (- 00.>) 'Region. globalization. dc\'clopment'. Rt!givn'11
rudte; .l (6- ).
1
:; 9-.:'1
9
: Cypher. and Dietz. J.L. {2004) The Proce ....., nf
nomic Del London: Routl\!dge: Beer. A .. Haughton. G. and A. ( 200-')
...
WHAT KIND OF LOCAL
DEVELOPMENT?
!)eve/oping Locally: An International c .
. . omparzson
0
r L
1
.
Devdopmenr. Bnstol: Pohcy Pre's 'J oca and Regwnal Economic
For the evolution of local and rcgtonal de, clopm, h. .
- \:nt t mkmg c G dd
1. ( 1999) 'Evolutwn and conflKt tn loc.al economic d , -, e cs. M. and le\\man.
12- 25. C'>clopmcnt Local Economy 13(5 ):
On the nC\\ metrics and broader. more sustainable u d d.
n erstan mg of loc 1 d
opmcnt. sec \1organ, K. (2004) Sustamablc reg . a an reg tonal de' el-
. . Ions. oovemance , .
European Planmng Swdtes J 2{6 ): 87 1 o mno\ at10n and ca1e,
On the local and regional foundations of economic gro 'th S
1 h T \\ - see unlc\ p , ?QQO) . u b
and regtOna gro\\1 , m .J. Barnes and E. Sheppard ( d ) C : ,.. r an
Geography. Oxford: Blackwell. e s ' ompamon to Economic
.
' S7
CONCEPTS AND
THEORIES OF LOCAL
AND REGIONAL
DEVELOPMENT
Introduction
C\ er increasing integration of lo ..
1
. .
. .... .... ca mto global flo\\.., !:' d
and capitaL ... local economic differentiation rcmam .. end.... . o .. na c
d b . :.> emtc to capuah ... m
an tnay C\ en e mten tf\ mg a" and co . . . .
.. .. "' .... mmumcauons cosb tall.
Dt.:spttc the numerous glo s\ prcdicttOns 01. th th f d ..
, t.: ca o t:-,tancc and the end
of geography, loca 1 and reg tonal dJt)ercnces m rna\' b t 't'
. . . .... .= ' \ m cngt vmg
ncr o s the mdustnalucd '' orld the c
0
r
1
'mple t d h ....
'
11
rcn m ur an and
dtspanttcs has bcc.n confounded by the new complexity and unprc-
dtltabthty o.f In the dc,eloping world tt)O. regional
and urban tnequaltttcs ha\ c reached unprecedented . Thus. it seems
n1ore itnportant than C\ er to the cau-..:nJ. locai economk
'-
gro\\th.
(Sun ley 2000: 1 S7)
Connecting \\ ith the gro\\ ing importance and profoundly changing context of local and
regional de\ elopn1ent introduct!d m Chapter 1. thb chapter addrc "c thts challenge for
concept.. and theoric.: to pro\ ide frame\\ orks to understand local and rcgional de\ cl-
opnlent. Concepts and theories nre de\ eloped to help us interpret and e "cnse \)f
ho\\' and \Yhy thing .. \\ ork out in the s that the) do. The) should pro\ ide lb with
usable definition of concepL. an understanding of the main caLJSJl and rela-
tion .. hip ... and ho\\' these nln) be articulated in mcchani"ms and .. ,nd
thcoric , are de' eloped to help and c'\plain and regional d '' dop-
tncnt space in place and OH?r tunc. The of conccpis .lnd theone" 'e might
usc interpretation arc linked to otn ers to the que ttOiL ")f \\hat kind of
local nnd regional de' elopmcnt Jnd tor ''hom dtscu: eJ in Chapt r - 1:
11
" "-'hapter
rc\ icws the t itnportant and intlucnt in I and of an i regional
de\ cloptnent. It pro\ ides an Jccessibk dnd of the nwan \lrk
of understandine and L ach appn),H.:h is rc\ 1e\\ ed. its limit.tl
1
\"'
11
' lil:-."u,-. .... 1
- b . 1 1r, ttl'"' )J1 rh ('f I c .. "-. II Hnd reg10n:1l
and conncettons are n1adc to the su 1.1,t tt.: l n .....
de\ cloprncnt for further reading and rdkction.
The is organi cd arvund the different schools :: \,fappn h
- t J '1. ) 1\ d'\ Ptth.rdlt th lf"tl '81
to um.icr ... tanding and ant n. t: "
- '
62 -
UNDERSTANDING
F RAM E \'\' 0 R K S 0 F
. ' d nnkc a \ arict) 0 r IOns. Their
" , __ { o potnb ttn '
d. . tlke different llle . d'" of kno\\ ledge and onto log\ ll''
tra ' . cthodorgtoun -.
.. , nolocl\ - thcOt") of the m fl d f't' 'r "c'' approaches cnn de\ elop 01
1
the
cpt,tu :::. . . b tract o en 1 t: , .
t
. or being tn the '
1
' . t' , . ttn' fran
1
c\\ orks of understand mg. l'hcoJ
0 e . h, 'JeCtiOil 0 C' lS b
t>a i,; of cntict m and t rc. . . . , . nd tht'ir
0
,
1
n conceptual de1 clopmcnt. ohcn
' . , . onsc to cnuquc d . . . .
,, oh c O\ cr t1me m . .
1
. , . r h tnd changtng poltttcal C1rcun1st,1n cs.
t: o . , emplrtC.'ll t t: '-t:cl L ' ... . .
in the light ot on,omg . ,. thcv arc constant I) c1 oh mg m parallel 11 1th
t
"'nd theories arc not set tn stont:.
Concep d 1-
k understand an C-'P
the \\ orld they see to . , llO\\ particular theories address comn1on ques-
. . . thi chiptcr C\ {U11tnC!' c
tach :cctwn
111
. ' _
1
. _ . , the conceptual building blocks used by the theo-
. , ISC fir t. \\ Mt at t: . . .
tiOrL . These compr d'' L
1 1
) th conceptuali c localttJcs and reg1onr., ... nd
... the define l O\\ ( t t; ..
nc. and ho\\ art: ) d
1
. . _ the purpo c and focus of the theories? .re
. 'd pment <> econ . \\ Mt L
thetr e' t:
0
. d . d phitf For om c. thi may include fundamental ques-
thc\ >eel..mg to under. tan an C'\ ' . . . . 'I
- . h h J 0111 " rctlJon - !!!O\\ more t ap1dly than others. \Vhat
uon. ot regronal gro'' t \\ ! 00 t: .0 .
f 1 . n\ "roencc and dneraence? \Vhy are local and regiOnal are the d\namtc. o rcgwna co t: ::: , . b .
- -- , 1 It-: .. "'r i t 'nt O\ er time? Thtrd. \vhat arc the constttuent elements
dtspantlc Ill oua ' ' e arc pc t . ?
I t - 1 r10 n n1cchani m and processes - of the theones. Fourth, what cau a agcn s. re a v. .
kind of e\planation do the thcorie pro\ ide? Fi fth, ho\v do the and
relate to local and regional dcYclopmcnt policy? Last, what are thetr and
tat ion, '? \\' e begin our re' ie\\ b) focu ing upon one of the earliest and tnost tnftuenttal:
""'
the neo-cla ical approach to local and regional development.
The neo-classical growth theory of local and
regional convergence
In the tradition of the classical economics of Oa, id Ricardo, John Stuart Mi11 and Adam
Smith. nco-classical economic is characteri sed by microeconomic theory developed to
C\ amine static rather than dynami c equilibrium within economi c systems. Disparities
m regional growth arc a traditional concern of nco-classical approaches to local and
regional development (Borts and Stein 1964: Williamson 1965). In this approach,
regional growth detennincs regional income and economi c and social welfare. Local
and regional 'development' within thi s theory is focused upon the long-run reduct ion
of geographical di sparities in income per capita and output. The causal mechanisms in
the theory predict that such spatial di sparities will reduce and mo\ c towards or converge
upon an economically optimal equilibrium in the long run (Martin and Sunl cy 1998).
The thcorv seeks to explain I d d 'l1y
_ J \\ lere an why such convergence does not occur an \\
conn.nue to grow or diverge between regions. ' Regions' are understood as
subnat1onal tcrrttonal unns and have been th . f h theory.
c 1 e mam geographtcal focus o t e
onceptua ly, measures of regional growth are several in neo-classical theory
and Taylor 2000). Output growth refers to the expansion of producti ve
c:apanty wnhm a rcgton and illustrates the t . . . t' ng the
. . . ex ent to which the reg1on JS attrac t .
key factor, of productton capital and labour Outp t l k . measure of
d
. . u growt 1 per \VOr er IS a
pro uctiVJty and reveals how efficiently . . . . gional
. . . resources are being used w1thin a r e
economy. I hts measure relates directly to th
1
. . . f specific
e rc ative cotnpetttivcness o
CONCEPTS Or LOCAL AND REGIONAL DEVELOPMENT
rcgtons in t:omparison with oth\!r region\. Output growth per capita relates growth to
the population of a rcgton and illustrates the relative level of economic and social welfare

in the region.
1
11
the nco-classical mode I. rcgiona l output growth is dependent upon the growth of
three factors of production: capital stock) labour force and technology. Figure 3. J illus-
trates these detenninants of regional output growth. Technological progress is seen as
a key contributor to growth due to jts influence upon productivity growth rates in the
long run (Armstrong and Taylor 2000). Innovation and technology have the potential
to increase output growth per worker. ln this basic version of the neo-classical theory.
Investment
/ Regional
r
by region's
.
savtngs
residents rate
Growth of
capital
_....,
- ...,
stock
Net inflow Rate of
'
of capttal iL return
tnto the
I"
relative to

other regions reg ton

Regional
Net L
wages rate
in-migration
-
relative to
of workers other
regions
L
Growth of REGIONAL
labour
.....
OUTPUT ...,
GROWTH force
Population L
Birth and
growth
- death rates
Inflow of
technical
knowledge
from other
regions
Technical
progress
Investment
..... in education
and skills
t growth
f
redional outpu
d
t minants o b
Rgure 3.1 The e
20
oo 72)
n and Taylor ( .
Source: Adapted from Armstro g
[ 83
. - - -
FRAMn .. ORKS
OF U\DERSTANDING
1 r import,mt such hurnan L'.lp 't
1
. I han,.,.c as ''ell ot H.: . . ',J ,
rcchnologJca c ' c h . t , ar .. discmbodtt.:d or treated tndcpc ndcml v
. d ulatton grO\\ f I<l t.:S ' t: r Of
sa' mg. an pop . H, , , thi . theon is otlcn referred ro as C\ogcnous Ill\)\ 'tl
1 d labour rnput..; . t:nu:. s . ... ' 1
cap1ta an d' t .. . arc C'\ plaltled in the nco-class teal approach by v
1
.
. al rro\\th . ' ,,_
thcor} Regwn g .
1
. of pl\)duction: the rate of technological prol:!r'
h orcl\rth ot t 1c mam '
atron.
111
r e " , " pita I c1nd labour - the capitaltl abour ratio. Product , It ,
and the rdauorLhtp bt:t\\cen c,l . . . k .. , . . . .... . )
. 'If cr'asc onh lf capttal per \\Or t;t mcrcascs (F1 gurc J :> )
t per I \\ 1 Ill t.: ' "" -
. .
1
. llp ott en referred to as capt tal deepen mg (Clark et a!. 19R
6
)
Thi, 1, a po 1t" e rc atwns 1 . . . . . .
. d r Jt\ increase occurs at a fulhng rate due to dnnm1sh1ng man nal
HO\\'C\ cr. tht pro uc " " . . . .
Th. cetttrtl m nco-da steal cconOJntcs. beyond a spectfic le, ll of
return . t t a ' . . . .
h t 11 r" uJt onh m dec rca .. es rn the addtttOnal margrnal output or the mput furt cr tnpu \\ t t: .
d t 1nput \\hen the additional or margma1 product of 1abour ro
pro uct per um . ..... . . . .
then an equilibrium position ac:htC\ cd. o\t tlu pomt there IS no mcenttve to mcr\!ase
the capital labour ratio.
:\eo-cJa ical gro\\ th ha C\ oh ed to under tand changes over time. lt foe se
upon the uppl) of of production and a umes their perfect mobility across and
bet\veen regions (Barro and aJa-1- \ tart in 1995 ). The theory assume perfect kno\\ )edge
about factor prices and the economtcall) rational and efficient choices of buyers and
. in re pon e to ignals. Economic returns to the increasing scale of
economic activitie arc a sumed to be constant. Perfectly functioning markets are seen
as capable of ameliorating or reducing rather than exacerbati ng or increasing geograph-
Output per wor:-<er(y = YIL)
YIL -:. f ( KIL)
Figure 3.2 The capital/ labour ratio
Source; Adapted from Armstrong and Taylor (2000: 68)
Capital per worker ( k = K/L)

CONCEPTS OF LOCAL AND
___ REGIONAL DEVELOPMENT
ical 111 cconomtc and social condi tt . L d
ons. n cr the 5tnct ec
1
-
mHJ market-based conceptuali sations of the n,
1
onomtc rattona tty
co-c model the pe fl t bT f
factors of production of capital and labour mov. t . r ec mo 1 tty o
c o rcgtons offenng the highe t I t'
rates of return. Finns look for the most profit able
1
, t' s rca tvc
. oca ton5 and labour seeks the highest
wages. The adJustment mcchant sm works because re
7
. h h. .
r 0 , . gtons Wlt tgh capttaltlabour ratios
have htgh waoes and a low return or ytcld on mvcstme t C
1 . . . . . n aplta and labour therefore
move m oppostte dtrecttons. l f tgh wage regions los ,
1 , . . . e captta and attract labour.
Conversely, regtans wtth low capt tal/labour rati os have lo d h.
. w wages an tgh returns on
investment. Low wage regtons lose labour and attract capital Th. k d'
. . ts mar ct a JUStmcnt
mcchant sm works over the long run to reduce regional di sparities in the capital!labour
rati o and reg10nal growth. Reg10ns wtth capital per unit of labour tend to ha\ c
higher relat ive rates of return and higher initial growth rates than regions " ith higher
levels of capttal per worker (Barro and Sala-i-Mart in 1995 ).
In the nco-classical theory, regional di sparities are on I} e\ er temporary since spatial
inequali ti es set in motion the self-correcting movements in prices. \\ ages. capital and
labour to underpin the eventual con\ ergence of economic and social conditi ons between
regions (Marti n and Sunley 1998). In concert , technology diffuses across regiOns to
all ow 'catch-up' and geographical equalisation in levels of technological progres:,
(Malecki 1997). In theory, convergence m output gro\\th between regions occurs and
an equi li brium position is achieved.
The neo-classical approach describes different types of regional convergence.
Conditional convergence refers to movement tO\\ ards a steady state gr0\\1h rate resulting
in constant per capita incomes, consumption le\ els and capitaldabour rati os between
regions. It is conditional because the savings rates. depreciation and population
growth rate that influence regional grO\\ th but are treated as external to the neo-
classical growth model can differ across countries. Conditional convergence docs not
necessaril y result in equal per capita income le' els across countries.
gence results when the grov.1h model parameters arc equal. Richer countnes "Ill tend
to grow slower than poorer countries \\ hich start from a lower le' el of
For absolute convergence, the neo-classical model suggests that per capita incomes w_III
. Th del has different measures of spattal become equalised across countnes over ttme. e mo
fl ) easures the speed of convergence.
convergence between regions. Beta (,..rcon\ ergence m ,
h
. h regions o,er the long term. per
Jt occurs when poor regions grow faster t an nc er . . .
. . r h. there ts a negattve relatiOn-
capita incomes equaltse across economies.
11 1
. . , t the
. . nd the Je\ cl of per caplta mcome a
ship between the grovvth of per capna mcomc a . . I' tv and is the
)
. measure of mcome mcqua I .1 '
start of the period. Sigma (a-convergence ts a . t a gi' en point in time.
. . ome bet\\ cen regiOns a
di spersion or spread of per capi ta me . . . bet\\ een reo ions. although
d
1 per cap1ta mcomc o
Convergence occurs when the IspersJon . . . . A. com crot:nce L"an occur
. , h g'ons tallso\eJtlme. tJ t>
not necessanly bet\veen people "1t Jn re
1

without a-convergence. d J ... . ,
5
inter-regional convcrg\.'IK'l.'
.
1
1 approach that a CJ ft: sl: . .
1 Another 1mportant neo-c asslca ' r ,
1
?000). In thJS appronc l,
. . a (Armstrong and a ) or- .. ,
ts the theory of con1parat1ve advantaoc . . . . h h they hold a comparatl\ t:
... ... omicactt\tt tcs tn" tc . Th
nations and regions spec1altse
111
ccon . b d nt f:Ktors of produc:tlOn. Js
. . . tl . t uti thctr a un a <
advantage, principally 111 mdustncs
1
'
1

"
- -,
._. ... <
. .. . . -
The evidence
. . . f n, ,_ It ,
1
-.d rh rcgit)lla I er"t'nc,
'\,llnttl.llll.lll. l.l l t '.. .... .... . '- IS
i
. . t Hl)lb (B.lrtt) ,md Sall-t-:\larttn t99l: ;\lanin
1 1 1ll 'fl ,l '\h.m ,llld II l . . . ' 1(
( , \ , md l
1
, \.\)n:tdcr.tbk 'annttons tn the "), d
1 : . . - . . . .
. . , . ,
1
., 'lll'l' (.'1\l'' dt ..."ll Ill ' tn tit f1crcnt ( \ nn"
0
,
1
,
,md '\.( '!lf (.)J '-l'- n , , ' b
\
1
... \
1
. ltll.i Lc..11l\Cn!l'nccottcnftuctuatc ,,
1111
,l hi . '"arn:m .. l, l e
. :, .-,,.,'-iu:uH! t:h..' ot gn.)\\th than tn the do,,,1 .... ,,
1
,
'\.')I}(.)Jlll( \.\ l .c . tl ' , . :: '\ . . .. ' - ... ,, l
\ . ....
, .. J ),,,.,.,:.)
11
'(''" 'H!l';l'"' rn general appears to ha\c siO\\cd t' ll d
pt I .\) (. I \. ' '' ' ' ::: "' " .._. t
cr.!Oi\ :-:nc"' t;li.' fO\'t), tDvlf()ni i9,)3) \\ hik E'\,1n1pJe 3.J

:ww tlK' Eurt'!t\lll lllt)ll tt' t C'\pcticncing national cl 1ce

P't\\, 'tl \kmbcr f 1 k\d or di\ crgencc. Club trgcr c'-' i ..
t)tl --n ,, ttknr whcr" grtl\\ th of countries \\ ith sin1ilar tructural char-
,1 'l 'ri. tt and initial condtt1on::. c,.ln\ 'rgl'. The rdati\ el! n1orc prosperous and de, el-
OfCD l'l)UOtrlC,. d '\dt)ping ,mJ undcrJC\ doped COUntries fonn three
com cltib "ithout any ar: con\ ergencc in cconotnic cro\\ th
'-
il 'h\ th 'm ( \l,u1in JnJ I t)4, l. t the regional le\ el. gcographic,ll cluste mg
t)t' g.nmth rJtcs .., rtknt m the Umt "d ""t3te:-. Europe '' ith ..'pat iall) proxinMt;
groupmg (.)f !:ht Jnd "lo'' "r -=-rO\\ lh reg10n:-. ( and \ yic"-en11an 1995).
Example 3.1
Regional convergence and divergence in the
European Union
a "ommon . .
llOih uf the
11111
. . .apptoach to reg tonal grO\Yth. tli ffcrcnt intcrprc ta-
" m tC!!lOnal dt pariti \ ... . . . . .
tl1 diftcr b''l .. t ..... , <.:
0
'(.:
1
ttme m the European Cmon. Otten
. \.) t lC ll . .. Ot . . .
u cJ. R'-.-cJrch .. .. . .\.: .l parth.'ular tcchmquc. data set or tin1c
.. . - Cl:Onomctnc models t . . , "' I .
t' 1dcm a n.h. I urop, .
11
.
13
s lOt1L udcd that the rcg1ona I convcn!t:
. t \\l contmuc (\1 . 19 .....
mcrc.1. mg C\r1enJitur... . . Ut
4
6 ). Other analYst.:s that.
'" t on renwnal )1. . . . - ........
nnrrO\\ e l lndc d .. p\ H:) regtl)nal di 1x1ritic in Europe lun c not
(
p 1()0 t omt: mc1 ur .. -
ue:a - - ) ant the impact )f . suggest such incqualitic hcl\ c \Videncd
P
r I ". t regtonal polic\ h'\ h
Jp (Rodrh.!ucz-P\.)s , ., d . at t n1arginnl for grtl\\ th in the
l - 'n ratcst 004) ._ ...
) ' t\hl'n 1ernher ... tate ha\c
1
:
11
, - At the national le' \..:L incon1c
ha\l ri n b , a \:f1 . in , d I
region!' \\it I lOme an uncn1ploytncnt
acrom J ....
1111 1
' ember St
' b) (R . .. lntcn1ntional cotn has been
.. l)dngucl-Pusc
CONCEPTS OF LOCAL
AND REGI ONAL DEVELOPMENT
!\"::> Tabk J.l the C'umn . .
ll:sston ( 2004) tntcrp . 't .
in ( i ))P per head the European Uni >ll U . . s omc <.:on\ crgcn\..:e
t smg nne ot the k , .
,
1
btn l.'. Hd.t gence) - the 111, crse reht ' _
1
. C) measures dt scu !'>C

1011
:S Hp g 1 l
pt-r lK':H.I is tdent fot each of the time perio i f t
1
an<. ttllttal GDP
. ("
1
) t s tom I )f<O. Rcc:10ns with tl , 1 , ,
init1<tl k\eb o1 ,I) p\.:r h\:ad lhl\C. on the
1
. h, .. h.:
. . .... ug gro\\ th rates In P'lrti I . tl
ObJC< . .'t i\C I rcgiOtl'\ \\lth gro\\th under 75 per t:'H r I' l: . l Cll al,
\:t
0
t 15 a\ cragc '\PC i
strong gnn\th bet\\ ccn and l t>94. dri\ en bv
1
u} .
1
.
. . .. , .
followtng the unthl'at1on o1 the former East and \Vest G , . .
1
h . . c.m
tl..:l mcmy. c role ot regton1l polic ,
in crgcncc through the Struc..:tural . , . . ' )
, . . s t:s r\..:t:ogntscd and promoted b)'
the ( Otl1tntsston. On the other measure Sigm
1
(
. . . . .. ' cr-convcrgcnce) - the dtspersion
ot per captta ttKOn1e bet\\ ccn at a nivcn point irl t
1
. .
1 _ . - o me h a so C\ tn the
furopc,Hl L nton bet\\ ccn 1980 and 200 l. disl)'lritics .. .
, . . ...... ' ' rcmam an tmportant '""ue
tor the L mon. hO\\ C\ cr. parttcularlv in the cont"""t th l
, .... ... c en argemcnt ot me
and the accc-; ot' ten nc\\ )t,r:es in 2004. Cyprus. Czech
Republic. I Iungal). Lat\ ta. Lithuania. 1\lalta. Poland. Slovakia and Slo,enia each
has IO\\ tr k\ cis of (iDP per head than tnost State" and in .;:
0111
. ..
1 ... . ..,
similarl) marked regional di .. parities 2002a). The European Commission
that C\ en if grO\\ th in thl: ,\cccs:-.ion Countncs (plus applicant countries Bulgaria
and Rotnan ia) can be , U!-ltaincd llt I .5 per abo\ c that in the rest of the European Union
- for C\.ttnlplc grO\\ th of 4 per cent per year relative to 2.5 per cent in the EU15 - average
....
G DP per head in the t \\ cl\ c countries \\ ould remain bclo\\ 60 per cent of the enlarged
EU27 <l\ cragc until 20 1-;. Region"tl convergence in the European Union. then. a long-

t rm
Table 3.1 Regional growth disparities in the European Union. 1..980-2001
1980-1988
All EU15 regions
Objecti\e 1 regrons
Other regions
1988-1994
All EU15 regions
Objective 1 regions
Other regions
1994-2001
All EU15 regions
Objective 1 regions
Other regions
No. of regions
197
55
142
197
55
142
197
55
142
GOP per head
(% g"rowth rate)
1.9
2.0
1.3
1.4
1.2
2.3
2.6
2.1
Beta convergence
rate per year (96)
0.5
0.<+
2.1
0.7
3.1
0.8
0.9
1.6
0.0
67
F R A 1 E \\ 0 R ,, S 0 . l
h to regional policy
'
icaf approac
The neo-c ass . t. th lllfl
'\.nlltlatwn o .... H-
1 tc ll .md tb l t . I . bl, ..., rcgtt)nal P'-)IJC\ b,, ll.
'\\.'l)-L . , D uktl tn ,1 c.. - - - ) \:o,
I
,r rctltOn:ll t. ..... 1
1 1
frcc-nlarkct approach. I d
11 t.l '- ::: l - b 't.'ll lii..'(J ' ,, n,
.... ,,-.11 t!fO\\h c.. II, )r' tmcn cntton due to
l' . - . l en rcg.lfl l . . .
rh lt .011, "til hlPP t )\\
1
r...t .... cqut hbn wu or that t ,, til
, '" .... d .. , thnt mo' l' " ' . .
)f the i!fl)\\ th mo ' ' f t' . n 'flll'tlt'l..'. In the I:uropcan l nton. for e'\<l mplc
" . . ... . , c the l) L l)t t . . ,
either htndcr t)r Jnllt.O. .t
1
. u .... cd in the geogrnphtcal anal) sts oi the clln
1

... re of GDP per L\tpt ,l . ... . . "' , b ,
the ourput mtd u
1
, ( Euront'.ltl con1n1tSSIOl1 2004 ). 1 he 1ocus been
.. . . for rcrrwnai ptl tc: .J t .
t"liltt} ot . -=:
1
... . Jit't tnCt)tll(' k\ cis and ho\\ IO\\ -1 ncon1e can
. . t ot rc<lJOfl,l p\.r ltlJ " . . .
tht: dctcnnuMn :=- .
1
,
1
t 'h ht <lhcr-incotnc rcgtons. ldenttfytng the intcnen-
... '(T, ) catch-up "It
1
n.: '
1
"l. =
et)l1\ t.f.:-t t r ..
1 1
pc "d-up con\ ha been central to reo
1
onal
)n to correct market tat urc-.. dOl (; . . ... . d . b
tt<. .
1
d ... , 'lopnlcnt poltc\ dt cu sed 1n tnorc etatJ tn Part ld.
Local and regwna 'c
The critique of the neo-classical approach
. .
1
h eo ell
1
c
1
1 rrO\\ th n1odel ha\ c focused on scveraJ issues. First. its
ten-' <:::::
t
011
are mterprded a .... unrealistic (Marttn and Sun ley 1998 ). Factor
marn a::.sump 1 '
mobil it\ is le s than perfect lAtmstrong and Taylor 2000). The access to and a' ai lability
ofcapi;al j- markedly une\en geographically (\Ja on and Harrison 1999). While capital
ch mobile. labour' cconon1ic po ition. for instance in the housing tnarkct, and
"'
tie of ocial reproduction. for in-..rance through fan1ily and the education of chtldren.
fonn attachment to place that can ott en militate against geographicaltnobilit) . Indeed.
nco-cia ical approachc ha,e focu cd upon uch issues in explaining persistent regional
Table 3.2 Neo-classical regional policy: the 'free--market' approach
Theoretical approach
Causes of regional economic disparities
Political ideology
Approach to reviving drsadvantaged regions
Regional policy
Characteristics
Neo-classical economics
Supply-side flexibility
Correcting market failure
Market failures
Inefficiency problem in regions due to labour
market rigidities
Lack of entrepreneurial culture
Excessive state intervention
New Right/neo-liberal
Popular capitalism
Deregulation/liberalisation
Privatisation
Small state sector
Enterprise culture
Correction of market failures
Deregulation of regional labour markets
Tax incentives to promote efficiency
Minimal expenditure
Selective assistance
Sources: Adapted from Martin (1989) A
rmstrong and Taylor (2000)
,
CONCEPTS OF LOCAL AND
REG I 0 N A L DE VEL 0 PM EN T
ttrH..: lllploytnent di sparities (Armstrong and Ta
1 2
( ( ( .
Y or J) J). Perfect
tinnnbk. Investors and arc not perfect\ .
1
ormat10n 1s ques-
y m armed and able t d
nally to pttcc \tgnals. ( on1pctition is oft en impe ii t .
0
respon ratto-
. r ec too With many markets d
and not reflccttng the ideal of many buyer d
11
. or goo s
s an se ers each Without signific t
tnnrket power (Robtnson 1964 ). The liJnitati ons of th , . an
. . . f e comparative advantage theorv
con1pnsc tt s stat1c ran1e\vork based on inherited fa t d . "
. . . . . c or en owments and Its neo-clas-
sical assun1pt1ons of dtmtnt shmg returns and technological
1
.
. . equtva ence between reg
1
ons
and nattons (K1tson eta/. 2004). Howes and ( 199
3
.
35
. d . .
. . . ctte m Martm and
Sunlcy 1996: 274) go further tn challenging the Ricardi an mod
1
f .
. . . . c o comparatt ve advan-
tage and the soctal welfare Hnpltcatt ons of the free trade model d
. . . ere ts some anger
that the unfettered pursutt of free trade will act uall y and employment and
lower vvorld li\ ing standards' .
Second, the external or exogenous treatment of technology and labour weakens the
01odel. Technological progress i profoundl y uneven geographicall y and technology dif-
fusion exhibits strong di stance-decay effects (lvlalecki 1997). Shifts in the technological
frontier have questioned the assumption of constant returns to scale and the productiv-
ity relationship described by the capital/labour ratio. Such have stimulated the
de\ clopn1ent of endogenous grov. th theory - discussed below - which seeks to embody
or internalise technology and human capital. Indeed. Almstrong and Taylor (2000)
suggest the long-run persistence of di ':) parities in regional growth rates may be due to
the differential ability of regions to generate their own technology and adapt technology
frorn elsevvhere. Linking to the notion of of development unfolding over time. the
likelihood of inter-regional convergence has been linked to the later stages of national
de\ clopment (Wi lliatnson 1965: Richardson 1980). This convergence is explained by
the eventual equalisation of labour n11graoon rates. capital market development. reduc-
tion of pub) ic policy bias tO\\ ards core region'.) and the growth of
Third, evidence suggests the neo-classical adjustment n1echanism typtcall y_ fa1ls to
"ork or operates only in the \ et) long run and/or in specific _time
and McCon1bie ( 1997) e\'en suggest that obsen cd convergence ts With expla-
nations other than that provided b) nco-classical gro\\'th theory. m
. I . . a th dynamics of rcglOnal dtspanttcs)
logical diffusion and regional pohcy. In exp amtne e . .. ,
, l , . 'Th neo-classtcal adjustment mccha-
Annstrong and Taylor (2000: 85) suggest t 1at. e
. . , F d t 11 ' the vef) detem1mants of neo-
ni n1 tnay play a relatnely m1nor role un atnen a ) , .
1
=-ntl "
. l b . [i rce and technology - cirC 1111ere J
classical grovvth theory capttal stock, a out
0
,
1
.
1
tl eorv still predicts
. . M . d S nlc\ 1998) 't ct neo-c 1 .,
geograph1ca1ly \ anab1e ( arttn an u . It } t oo 'ncitv space
. I bour and captta s 1C er ..
conditional conYergence e\ en gtvcn . a . . . th approach
. . 1995) D ptte e
(Barro and Sala-t-Martm . re explore the
d
1 lc' elopment as \\
still highly influential in local an regtona c
remainder of the book.
g
. nal divergence
Keynesian theories of local and re
10
. .. onomist John laynard nt.:
. .. fi m the ernment h ...
Keynesian economics takes 1ts narnc
10
d , pi
1
,.
111
cnt t
. .. d u on the un er-un "-
whose distinctive approach P
-
70
t\IDERSl \NDit-.G
F R ;\ M E \\ 0 R I( S 0 F L

. . )k <)f tht tn mnnngtng dt'tlland

. ' f I ' '' )lll)lll\ ,IJld thl: ll I . l \ . I
t) t lt Ll (. . . I Cl'lHlOHllt.'!-i, hh t<k.ts l(l\ c..: )l t: n up hv
I f) u-.ed lm n(H . . . .
\ltiH)ttgh "l)f" ll . ,, ft)l'U:-. upt1tl rt'dlll tttHl cd 1 c..:gtonal gr
0
,, th
. " ., llt'"tdll thu>J H.
t.
1
i r ,,'1
011
,11 dt:' upon th .
. . ' .. ) 1Hl,tdl to ftK'cl ,till .._ t:
111 thtll
1
ll l .
11
, upon lJIH.kr:-.tdlHimg and C\ phu ning
I . IC tl tppWdl. ll I.
criflqllt' t)f !lCO-C ,}Y' c ' f . tljlH14tl on,)\\ th dtspanfiL's pCI'SISf l\t1d <lrC repro.
tt
r""(ltls\\1\lt- :::::-
. ld 'r''I1L't'' lt \,;,, .. .. ._. I ..
rcg10na t\t ht , ll ._
1
cal approach. 'dc\l: opmcnt 1s equated ''llh
. umhr ll> tht nul-l
duccd 0\ cr wnc. . ' . . . f l'L''' ions arc the I focus. In contrast
. f .,,.
10
n d d1 ...p.u tttts (lll(. :::::- .
rcductton ' ,
1
tlwn the long run. adJustment
h, h, the tnt ( nun .. .
t t.: t n
1
,
1
t' . ..... upon role of demand rather thnn tact or suppl v
l Ke' n('Wltl mo< L .
111
t lC " .
11
1 '\ tc 'rbatltH! or increasing rather than an1cl ioratino or
<lfC ('<:n p<)lt nttct ) t.: , L . - . . o
d t
,
1
.n t'\.'OnOJll 'C ,UH.I -.OCI.ll condttiOOS.
rcducme bpttn
-
b
. , , ..
1
.-.()rl-.
1
f ldt to thcrr own de\ ice . arc spat iall} disequilibri-
ccnu. t.:
1
....
c , ,. l"'lc ttc; 1twlomcration lead to the cumulatrve concen-
an ne. c co nom k (. " .. ' ' ' ::::::::::
of capital. lc.tbour. and ourput in certain regions at the expense of others:
regional de' dopmcnt self-reinforcing rather than self-correcting.
(iv1artin and Sun ley 1998: 201 )
Drawing upon the of John \ laynard Keynes ( 1936). Keynesian theories usc the
approach and language of neo-cla. sica I economics to reach contrary conclusions.
Export base theory
E\port base theory typifk the Ke)nesian emphasis upon detnand. Differences m
regional grO\\ th arc expJamed by regional differences in the gro\vth of the region' s
e\pOrts - the good5 and sen 1ce') that are out ide the region. External demand for
the region s output the growth rate. In contrast to the endogenous
approaches discussed belo\\. are seen to develop from 'without' rather than from
'within (Annstrong and Taylor 2000). Initially focused upon the exploitation of natural
resources and the integration of resource-based regions into international trade (Inni s
1
?
2
0: \'orth 1955), the export base approach developed theories of regional specjalisa-
ttOn and adaptation for co t d h . . . . .
. . n muc gr0\\1 as well as dccllnc. Reg1onal specJaltsattOn
111 spccifk export comm d t' . . . .
o
1
1e. \\as explamed us1nc:r the neo-classical cotnparattYe
ad\ antagc theory di cusse 1 b . R t>.
. . c a O\ c. eg10ns spccJalise m the production and expot1 of
commodate that usc the'r I .. I b
.
1
re atJ\ c Y a undant factors intensively whether they are
raw matenals labour capital d h
. . . an or tee nology (Annstrong and Taylor 2000). As illus-
tr med tn Figure 3 3 the re i , .
b . ,.. . g on s response to external demand stimulates growth in the
astc or c..:\pOt1 ector and in the b . ' . . . .
effect . . u en tent res1denttary' or non-basic sector. M ult1pller
arc tnggered as Income a d . . . . . .
regional e . n cx.pendtture chatns arc stimulated wtthtn local and
conomtes Multiplie b
\VI
1
. . rs can e positive or negative.
11 e an overslmpltfication a d h .
immobil ity off: t f
11
amstrung by the assumption of the relati ve
clC ors 0 product iot b f
1
export ase theory established the irnportancc o
--=o" - = -" __ c 0 N C l p T S 0 F L 0 CAL AN D
CGIONAL DEVE LO PM ENT
Expenditures II
by the export
sector 1n the J
local sector
Basic octiv1tes
activites
---l
Income
from
exports
<---.,
Expenditures
from within
the local
sector
Figure 3.3 Export base theory
Source: Authors' own research
specialisation and the in1pact of external demand for a region' s products upon its growth.
Demand is determined by the price of the region's exports. the income Jc, els of other
regions and the price of substitutes in external markets. The internat ional competitive-
ness of the region' s export sector relative to thol:)c mother regions its growth.
Product quality and after-sales scnicc influence demand too. On the supply-side, pro-
duction cost factors, including wages. capital. raw materials. intennedtatc inputs and
technology, influence the region's export competitiveness.
The sensitivity or elasticity of demand for the region' s exports to changes in price
and incOJne is critical. Demand for inputs from other regions is also important. \Vith
favourable demand and supply, the region's export sector grows, demand for factor
inputs bids up their prices relative to other regions and induces inflow of capital and
labour. Regional disparities result. The duration of any such growth differential depends
t1 , . s and competition from altema-
upon factor shortages, subsequent tn at10nary pressure ..
. e improYcd compcttttvencss
tive suppliers in other reg10ns. AdaptatiOn may reqwr
. . . d the deYelopmcnt of new cxpm1
through cost reduction and! or productt\ tty tncreascs an . , . ,
b
Tt b t\\een reo10ns. I he cxport-kd
markets, depending upon the degree of factor mo I t )' e o . . , ,
. . . I . licr effects upon rcgtonal UK oml:.
growth process can be cumulative wtth posttl\c mu ttp . .... d f
. . . sed labour tnflow and dcman or
an induced accelerator effect on tn\ estment. mcrea ..
. industries and C\tcrnal cconomH.:"
local goods and services and the gro\\ th of sub:st Jary h s md relationships
I t' ' e, crsal of t e '
(Armstrong and Taylor 2000). A cumu a
1
' c
1
. .
1
d nd for cxporb. tcch-
l . Jh shifts tn t le cma
may also set in, however, for example t
11
oug :
1
.
1
appn)ach
. . ..
1
3 2 cxc.umnes 10\\ at
nological change and con1pct1t10n. Examp e .. ' ' . . .
1
d incomt in tht'
. I d .. anttcs tn grO\\ t1 an
has been used to explatn the pronounccc tsp,
of China.
Rt g1on. I dl P rit l
in Chin
t f. -.
1
in 'htn. b n a llllpnni 1 h, 11
. rh 111 n ,.
1 h-."' tram. th' l nn ..
11
)f c n 111& t t nns t > 1 0\n up th t' on ""'
I !i, , nil' \> I I . . ''
1l .. . J I t .., I )l m nt l lh ..' h lS I n )rtll!'\ 1 lll\ sttn nt
t i.. htnJ :- n.ltt n. \; ". tn
r, mt, ...nun " 1 nu .. . t , , 1 it 1t, onl( 1 n' n h nt _. ,f 1bun 1 ,
11
t J
i pn" , In .:n' !!I , ' ' . . nt
,'\l rt ut.. . ... T Ill, J IIIU'tt It . . hmu.t; th 19 ) b. Ill Irk . I dtfl Tt:lll' ha, c
.. , ( It Ut \s ' I I .
rt .lll' ' " d .
11
.. t\\ ....
0
th .. stnl m tn Ul\ 1 gt( ll!'. on
11
nru,, ..
f in '' b lil lfl r . . . ,
0
... h, ,
1
,t 1 ,n 1 mbn i 'I ns " y lurtng th' 19 "O
'til mt ' " n t ' ' s
''I""' , l"nt- n r ...l flbrah ... ttt n, iuring. th 1 ))(h th 1 ul "' DI 1,
-\.
1
11_c ,. ' mn . . 1
. . ,
1
1).; r nt in th . m!Jn,l ,.ll n, an I 144 1 1 nt 1 n the c >asta 1
1
ion
.; .t I . \. . J . I t
. , al ..:t n :11 hill, up n :1 \ l ,urp. 'slllg t l ' I l r ::; uth r ast tan
\h a. th. Phihpp
11
.: In n, 1a and Thnihmd. Taking a n ._ian p r-
"' r .:-..:'lfCh h
111
h ..1 1 d th n J < f p dlld reign dirt t in\
1
'\II 111111"' tit.,,_. 10 quaht! ., f U l-00.U !l r J II I hat (' :-; p rt XC rt ed a i .
:.
1
m , "'t u n th 111 th a t I gi n'. FDl-bas d and labour-i rnc:n h c.
........,......... ng-1) , xp "' h , mlu I ,ro,,1h in th oa:stal attracti n
.. m ( f bb ur fium tnL nd gi n .. Jn 'l th inland ha\ c
t from an. ...i._mfkant hn r pill fr n1 th gn)\\ th of the coa. tal
\ligrnti n fla ur tron1 tnlan i gton ha in gi< nal inconlc inequa] ..
lth 1,:--h th urbJni au n .. th rnt ri r i a ting as a ountcrbalan e. For
.. h1 , .. et "mnPnL fu.rth'" r Ia 'ur nugrati n to th apital-ri l;Oasta 1 region "iJI
: ...1 d1 ' rin . R :i nll h_c. i_ th ref or fo u d upon encouraging the
t n, tt and fi ret_n-o' n '\d \1pHal to the labour inland region..,.
Table 3.3 GDP, FDI and e ports by coastal and Inland regions In China 1 999
R g ns Rea GD? GDP
Coasra
Be.,ng
-
a '1
S angna
lao ng
Hebe
angsu
Zhe a!lg
Fu an
Shan dong
Guangdong
Guangx1
A\ erage or sum"'
PPC a
at 199
consta t
pnces
9960
8017
15.459
5,062
3.479
5.352
6,041
5.418
4.353
5,886
2.082
5,204
change
1978-
1999
255
218
184
242
339
472
739
812
533
637
325
411
GOP% of
natJonal
total
2.7
1.8
4.9
5.1
5.6
9.4
6.5
4.3
9.4
10.3
2.4
62.4
FDI% of
national
total
4.13
3.94
8.19
4.16
1.99
12.13
3.11
9.78
5.9
28.25
2.09
83.7
Exports
of national
total
3.2
3.3
9.4
4.2
1.4
9.5
7.0
5.4
6.3
40.4
0.6
90.7
11 c
'f LCJCAL ANn
n E (.t 0 N A L (i
'EVEt OPMENT
tnl mrJ
Sllc n 1
2,372
:199
1.8
tnner Mongolt
2,68
289
0.8
1.'1
JIIIO
3,182
O.l I
284
0.4
2.0
Hetlonf!Jtang
3,844
213
0.84
0.6
Anhul
2,362
1.09
345
0.8
3.6
Jt" ng '
2,339
0.88
289
0.8
2.4
Henan
2,456
0.81
387
0.5
5.6
Hubel
3,269
1.22
353
0.6
4.7
Hunan
2.562
1.78
312
0.8
4.1
Sichuan
2,234
1.48
306
0.7
4.5
GUI7.hOU
1,242
1.54
226
0.6
1.1
Yunnan
2.234
0.13
354
0.2
2.3
Shaanxl
2.058
0.27
0.5
222
1.8 0.9 0.5
Gansu
1,851 144
1.1 0.13 0.2
Qmghai
2.340 151 03 0.01 0.1
Ntng ta
2.245 179 0.3 0.04 0.1
3,247 377 1.4 0.11 0.5
A\erage or sun1 2.497 292 40.Q>t 11 8.7
Nattonal average 3,631 358 -
Note. ,. Sum of column cells.
Source: Fu (2004)
Increasing returns and cumulative causation
ExpJ icitly rejecting the nco-cla ical approach. Kaldor ( 1970. 1981) e plained regional
gro\''th per capita by a 's abilit) to pecia1i e and e ploit cale economic:,. Sectoral
\Vas in1portant too. 1anufacturing \\a interpreted a a fl) \\heel of gro\\ th
capable of I (l,tcri n g i nno\ at ion and generating . ignificant producth ity benefit and faster
growth for manufacturing peciali ed regions compared to re ource-ba ed regions.
Kaldor returns - rather than the neo-cla ical model' contant
or dimint,lung - v. ht:rt:b} incr a cs in inputs generate larger
in 's in quantities of output.. .rowth proce- e founded upon increa_ing return are
umuhtivc as 1:1 t gro\\ ing region teal a march on other regions and further reinforce
their regional ,pcctah at ion (Amlstrong and Ta) lor _000). Such increa ing retunl' are
to the di -cu s d belo"
d.. .r. d on in a circular and wnu-
1l' \\a) 111 \Vhtch gro,vth proce ten to aec -
1, 1 th 1- c"'ntral to Gunnar -
c.H I ve \vay anJ generate unbalanced reg1ona gro\\ c; ( ..,
I I '.1 '7) thcorv ;f cumulative ausation. follo\\ ing the Kaldorian and . eynes
1811
. . h th llmgr tu'.
approach. thi s thcor\ rat er an . . ... . .
. d th
0
-iti\ cro'"th tn1phcatton tor
tfl scale. agglon1cration or tcrnal t:cononues an e P ;:) . .
I
. . - . . Tl cun1ulatt\ grO\\ th pr h. ..
nntl rci ons that Wl.'rc tlt"t to mdustna K .....
.....,
, .
'- ----
. 'l'l\ be tht' ,a me in all regions. but cfticicnc) \vagc\.
\ ctua I monetary \\ ' .::,t.:' . . .
d
. d net
1
rv ,,-:}'<:' Ji\ id d bv a measure of labour productivity, tend
chnc J mo c. } "-=- . . .
tl) Jo,, cr m mdu-,tnalizcd due to scale economtcs. Stnce rcgton<; with
lo" cr cfficienc) ,, (an produce more output, which in turn leads to further
reductiOns m the efficiency wage (and so on), growth n1ay build on itself
\\ ithout bound.
Increases emplo';ment
and population
Increases labour
supptyand
paruapam
Increases demand for
goods and ser.'ICeS
I
In t a! Impulse
New firm locat10n or exstmg
f1rm expans1on
I
Enlarges the lccal and
reg10na1 supply base
Expands the
sector
Figure 3.4 Cumulative regional growth
Source: Adapted from Chrsholm (1990: 66}
( Da\Nki ns 2003: 139)
Increases agglomeratiOn
economies as a growth pole
Upgrades
Infrastructure
Enlarges the local and
reg1onal f1nancral base
and spendmg power
C 0 r-.1 C f:.l > f S 0 I I 0 C " I.
'' A tJ D n E ( I 0
J JAL DFVELOPMENT
' l'hrut tgh "tlll'h ctus
1
.
. . . .t ton work i . . . .
vtrt uuus c11 Lics of growth and dcv<.:l n tl postttvc dtrcction and
. . optncnt locally 'md .
tt1u, ncgat1vc n.: lattonslllps can reverse the p. ... . . . . ' regtonally. Conversely
. . I <>cess cHHI create . . . .
1
1crhnps rcsult mg from a loss tn the compctit' . VIcious c1rdcs of decline
. . . . IVCilcss of the rcgi , .
shod s such as pncc nscs tn factor inputs. on s exports or cxtcmnl
The verdoorn effect and growth pole theory
Unbal ann:d regional growth and divcrgl..!ncc arc cent ! t K .
1
a
0
cynestan thcori s f 1 1
and regi onal uevcloptncnt. /\'-. hgurc 3.5 outlin<.:s I) . .I .. . . c. () oca
. txon anu I htrlwlll 's ( 1 <J7S} .
1
.
nati on the feedback effect of th<.: region'. , h. ' cxp a-
. . . . s growt upon the export sector's
compctttl\ the knock-on d feet upon output an <.I fu
11
t . b, f' . ...
, . . . . ' let cnc tc1al cflccts for the
cxpot1 sector product1v1ty and compettttvcncss. Dixon and Tl
1
, ll
1 . , . . llr wa ( 97 ) empha-
s1sc the opcrat ton of the V crdoorn cf feet whereby the growtl
1
. b . . .
1 Hl cl OUt productiVIty
partl y dependent upon the growth of output. Positive and str()ng tl
1
b
. r grow l m a our
productl.Vlty and reinforcing. erowth pok theory draws upon
cun1ttl at1 \ c too, tn parttcular the potential linkages between propulsive firms
of generati ng induced growth through inter-industry linkages both backwards
and forwards through supply chains (Hirschman I 958) - and localised industrial growth
(Pcrroux 1950). Growth or poles may emerge, generated by agglomeration ccon-
om to propel locaJ and regional growth and development. In common with export
base.: theory, Fricd1nann 's centre-periphery model emphasises the potential for the
external i nducetncnt of growth, the povvcrful external economics of core regions and the
Capital
relative to
labour
costs
Growth in
_:_,
capital/labour
ratro
Cllange tn
wage costs
Change in
Regtonal
' output
growth
Growth of
labour
productiVIty
.., pnce of
1----:'1
regtonal
Rateof
technological --- ,
change
R&D
spendtng
exports
1
f eglonal growth
Figure 3.5 The Dixon-Thirlwa/1 mode
0
'
T 1 (2000: 9oJ
Source: Adapted from Armstrong and ay or
Populatton
grotlth
I
Growth of
..,_--7-::"1
exports
' \
Change In
pnco of
substrtutos
76 '
-
0 F L N D E R S T \ N D I N G
FRAMEWORKS
I
J, . hir
1 1
nd 1n t ntn$lat in!' l'\
. . i , ononllC l'dot: I" Port
n'k t)f pt)!ltJCtll .lilt u. a... ,.._
1
(knrt.ln (l ncdmann ll)
7
2). ln cll'lo I
. J the h. . St: \
dcm.ltld tnto gn)\\ t
1 111
11
., ddim:d ln rd.ttl()n,htp '' tth the cut ,
. '- . . , " Il l<!
".t)
1
t' )J l'\. clrnpk f t ont s or do,, ll\\" .
d
.. , .. .. ot au wrwtn) t ,lJ u
thctr rdatn c t.:gt u..:
h
to regional policy
The Keynesian approac . , . .
.
1
..
11
thL'Ot'lt'' nc!'>ian thconcs ot reg tonal dtvergcnc<.: hl,
. m \\tth nco-c , " , . , ( \e
In lOilllll( d .
1
polic\ 1 he potential ot markets to retn torce rather thl
!>tnm!!h mflucnct' rcgwnct . . . , . , , . .. .. . .. , . c n
._ .
1
.,., r .. . lrls .1 rok tot tht: stdte, cspccttllly at the nattontl
f('tli()Cltl JCS c ,. '
c.:
1
e bl., ltcv tntcn ( \ kCronc 1969: Kaldor 1970). Contrasting with
len:-I. am pu It po . , . .. . . .
1
, .,
1
d it rcgwmll poiH:). a long htstOJ y of Keynes tan Inter-
the Jll ' .... .
. -
0
.
11
polic\
1
.,_ C\ ttknt ( Ltblc 3 A). Go\'crntncnt-dtrectcd growth was
n:-ntJOnJ\t rcgt flu .. . . .
d
J t ..
1
bJ" to th O<.)tential to sttn1ulate mcreasmg returns to
I t'fC(J t.: u "- t
( Rost:n,tcin-Rodan 1943 ). BabnceJ and _e'en gro\\. th may be attainable
through go, cmmcnt intcrYention to e"tabh-,h vtrtuous c1rcles of h1gh !)a\ i ngs and high
.........
grv\\th (\ur 1961: tngcr 19-5).
In pi red b) the Kc) ne::,wn approach. dedicated regional deveJopn1cnt agencies and
mdustrial rate ,, ere pioneered under President Roosevelt's New Deal in the 1930s
by the Tennessee \'alley Authority in the United States. As we discussed in Chapter 1,
during the era ofde' elopmcntali5tn .growth pole experiments were evident in the 1960s
'' ith then propul i'c fim1s and of the day. such as chetnicals and automo-
implanted to st1mulatc ne\\ economic growth in lagging regions
Table 3.4 Neo-Keynesian regional policy: the ' interventionist' approach
DimensiOns
Characteristics
Theoretical approach Reconstructed Keynesianism
Demand-side stimulation
Supply-side support for industry and services
Causes of regional economic disparities Market deregulation and liberalisation
Structural weaknesses
Low investment
Drain of capital to developed regions
Inadequate and insufficient government
Political ideology participation in regional development
State intervention
Soc1al democratic
A National territorial cohesion and solidarity
pproach to reviving disadvantaged regions
Proactive policies at the local and regtonal level
Regional policy Public investment in infrastructure
Extensive regional aid
Automatic assistance
Decentralisation of regional regeneration powers
Sources Adapted f to local and regional agencies and authorittes
rom Martin (1989) A
. rmstrong and Taylor (2000: 211)
CONC I PI S OF LOCAL AND
REGIONAL DEVELOPMENT
1 { , iticism of the Keynes tan apnro I .. .
I' 1 pc,\kcd In th . .
19H0s due to tts Ltnl! vcn . c nco-classtcal and free-mark t
. I , ,\I)<.:C record, d ., . , <:
actiVttH.:S would have happened trrespcctt vc ofp hl' eadwctght effects subsidising
hn\.\ to mcuntatn groV'.th and some dramat' .
1
...
1
u tc support. uncertainty regarding
tc at urcs costl . .
( 1 aylot and Wren 1997). Dcspttc such crit' . . Y '" pubhc expenditure terms
. tctsm, the expcric . f .
the strength of fltr-,chman 's tri kl l . . nee
0
recent decades has
. c c-<. own eff ects . l .
di sadvantaged and laggtng regions: parllcu arly tn the most
; - 77
Most rhetori c aside r 1,
, c tcs upon a mod l f d
di [fusion based on the principle of bcncf)ts t . kl ' c
0
cvclopnlcnt
. nc tng down to t bl d
Conventional policy yet to flnd the key that
1
k rou e targets .
bled locales. un oc s the fates of truly trou-
(Glasmcier 2000: 568)
further discussion of the Keynestan-inspircd approaches to 1
1
d .
. . . oca an regtonal develop-
ment pohcy wtll be m Part I 1 I.
The critique of the Keynesian approach
A !though it attempts to integrate a consideration of the demand and the suppl y-side,
export base theory has been criticised as oversimplisti c, ignoring significant factors
within regions (e.g. entrepreneurial ism, public policy) and not providing a systematic
explanation of the determinants of demand for a region' s exports (Armstrong and Taylor
2000). Di xon and Thirlwalrs ( 1975) model has been criti cised too for fa iling to specify
the type of exports in which a region may specialise. assummg the export sector is the
only source of regional growth and generating controversial empirical evidence. In addi-
tion. problems have been identified in the model' s failure to clarify the complexities
of the V erdoorn effect and exactly how the di v1sion and specialisation of labour and
technical change fosters output gro\\ th and producti vity gains (Armstrong and Taylor
2000). More generally, Hirschn1an ( 1958) argued that or
ment between developed cores and underdeveloped peripheries can benefit both
regions and their hinterlands through ' trick ling-down effects that create the
products and labour of lagging region'i. Although the polari sation by

1
t egional divergence, l Itrschman
cun1ulative causation theory can be strong stunu t o r .
. kl d occsses cspcctally when
( 1958) argues that they arc countered by such tnc , c- O\vn pr . . f
. . . I' D I b rate state-led decentraltsatton o
supported by interventiOni st rcg1onal po ICY e
1
c
1
K, t984)
I
.. I larisation (Townroc anc cen \. .
propul sive industries n1ay re\ crse geograp 11ca P
0
. . I) ,
fi . nl ' to keep regtonal dtvdgc:ncc In
Whether such countervailing forces arc suf lCient
0
) . t ...empirical que. tion.
1 ergcncc JS open
check rather than to promote reg10na con' . .
1
in uncm-
7c absolute rcg10na
f:.vtdcnce fron1 the European Union sugg , I"
11
. widening during
. d to vary counter-eye Ica ) , 1
ployment in EU countnes rates ten
1 1998
. Boldrin and Canova 200 ).
sions and narro,.ving during bo01ns (Baddeley eta d.
6
"(l in the case studies in
Chapters 5 an <ll
Despite such criticistns, as we shal l sec Jn. ' . influential in undcrstamllng and
Chapter 7, the Keynesian approach rcmams )
explaining local and regional de\ elopment policy.
OF UNDERSTANDING
FRAMEWORKS
I and temporal change
Theories of structura

1 1
K ')'ncsim l:lllphuscs upon rt:giomtl l on vcrgcnc .
, In nne c ' c or
In cc)nrrn-.r ro the nt'C
1
,
1
t uiJ'>OrHI change ft upon local and rcgi
1 .' , f strUClUJ'a diH t,;
1
11(1
dh nee. rtnwr JC-' ..
1
, J
11
cHl 'll")' JH'<>C' onlCltnlCS 1ncot pot nt i tl g [)Cr
1

1
h' rmcaranct:\<>U ' O<s
dt.:\dopmcnt n. l
1
. Th. lut\ l! used of cycles ,
1 . l or sv!'rcmtc c wngl. t,; .. . dll<
of stn1cnu,1 ;
1 1
.. ,,)hicn1Jv un(.vcn of local and rcg1onaJ dcv
1
. uH.cpruali.,c r,1e gcog ' ' ; , c-
\\tl\C., f\) cc
1
_ h upon cxrhangt: and I actor pt t<.;C\ thcori . .
r In 10 t 1C uco ' ... . . cs
oprncn . . ..
1
ctnngt: have taken a broad r vtew. L'tlconlpasstng productic
f clll<f lUI d ' >n,
o rcn ' . , nd institutioth of govcrnn1cnt and governance.
technology. " ..
Stages theory
.,rae .. of economic growth tw vc tended to focus upon the national and regional
lev;b and cctoral change (P<:rloff et al. 1960). As Figure 3.6 iJJ ustrat<..:s. through time.

region and natjons are interpreted a moving through progressively rnore advanced
t'tges of economic th and dcvclopn1ent. fron1 agriculture to rnanufacturc to
to quatenwry or knowlcdge-baMed fon11s of dcvelopn1cnt (( lark Fisher J 939). A
'ratchet i evident whereby growth patterns get Joe ked in to place and guard
against future contmction, for example through densely local
public infrastructun;s, locali ed demand and labour rnarkct\ and innovation potential
(Thompson I '>68). The adaptability this n1ay afford localities and regions js developed
in the approache to innovation, knowledge and learning below. Scale
di from congestion and bureaucracy may counter thi s effect. .
Periods of rapid tran formation arc possible as a criti caJ mac,s of i nvcstrncnt and

nctJvJt y. may generate n ' take-off to underpin sustained periods of growth and 'devel-
opment chcnkron 1962; Ro tow I 97 1 ). Thi s rnodcl \Vas a hall n1ark of the devel-
opmental ism and liberal-market democracy protnotcd by th<..: Uni ted States during the
Cold \Var wi th the S , t U r
. . . o' tc nt on. ndced some arguL; that 'devcloprncnt'
rcqun cs ur h strudural ehangc .. ' 1 , , ,. f , . ,
, , tts Cclps d tl( transformati ons from existi ng states to
nc'". more stat . ( C . I . , I . .. . .
theot , . YP l Cr ctll( I> Jet/ 2004 ). f.:cho1ng the nco-classical
) of comparative advant , . , . . . . .
. fr . . . . . . dgc. O\ et tnnc, spec tal rsatlon and trade rep lace sd f-
su JCiCncy. Dtmtntshtng returns , I t . .
th. t
1
dfl( c mngl:s 1n the Internal di vision of labour propel
r d II It lOll x:t wuen sh cs . f) . I
and con tit
1
' < g C\ c opmcnt' equates with growt h and industri alisation
u cs trdn lttons through c } . . ..
con v . . ,, . . . ttc ll;\Cr more adva nced stage of econoJnJc a<.;tJvtty.
ut guncu IS ronstdcrc I . l' k .
<. more ' ' Ciy tn lht;; latter stages of development
Primary
c ._->
Tertiary I Quaternary
L-[ - >
Figure 3.6 Stages theo
I ry
....ourco: from (1939)
CONCEPTS OF LOCAL AND
REGIONAL DEVELOPMENT
1110
dcl (Wil lialllSOJl 1<)()5) ( riticism has f' .
. ocuscd upon the lin ,
ofsul,;h models: all natH>n\ 'lnd regions we . .
1
. car and programmatic logic
. re pt C< Jctcd to foil l
1
1
at h. Undcrdcvclopnlcnt theorists challcng ,1
1
. ow t le same developmental
. . Cu t lC IOCa of li . ,
that there were s11ntlar national patterns f
1
near stages and concluded
o < cvclopmcnt h .
differences (Ku/ncts I Y(>6). \1nronng the d. I notwtt standmg persistent
. . eve opmcnt trajc:ctor f d .
tri al nattons and regtons. particular form , d t Y
0
a vanced mdus-
. . . . an tr1eory of 'dc:vcl ,
assoctated wtth the nattonal focu.., of post-ward l . opmcnt was closely
. . eve opmcntahsm s , .
2 (Figure 2. 1 ). W1th 1ts en1phasis upon the cond'f .ummanscd tn Chapter
1 and requtrcmcnt
change. stage$ theory rerna1ns an important if not , d
1
s or structural
. . rea 1 y acknowledged . n .
local and rcg1onal development policy. :
10
ucncc upon
cycle theories
( ycJ c theori es focus upon the temporal evolution of local and . , 1 d
. . rcg10na tn ustnal struc-
tures and thetr relat1 on to local and regional development c . , h'
1
. . .
Jl;Ograp 1ca vanat1ons tn
spatia I factor costs are linked to the differential stages of product and industry life cycles
through the product cycle model (Storper and \Valker ) 989). Building upon its initial
micro-leve l focus upon the locational behaviour of US multinational corporations
(MNCs) (Vernon 1979), the product cycle sought to link regional development to the
export-oriented evoluti on of reg1onaJ industrial structures (Norton and Rees 1979:
Storper 1985: Sternberg 1996). As Table 3.5 describ<.:s. initially. innovating firms intro-
ducing new products retain locational proximity to key suppliers and R&D functions.
LO\\. elasticity or sensiti vity of de1nand to price changes for new products renders initial
regional cost differences relatively significant. Large urban markets provide
able and sophisticated to pro\ c immature products. With maturity and stan-
dardisation, cconotnies of bccmne relatively more important than flexibility.
Decentrali sati on to exploit relati vely cheaper labour in underdeveloped regions and
nati ons occurs with potenti al export back into the core regions that. by this stage in the
cy<.; lc, have already developed ne\v products to restart the process (\Vcinstein eta!. 1985 ).
Criti cisn1s of the product cycle model concern the model's narrow focus upon in.d,i-
vidual products rather than industries and markets. its relevance to
. . . . h ost consideration tts reltance
t1n1c penods. 1t s ctnphasts upon labour as t e pnmary c . '
t d 1 k , " its emphasts upon the deter-
upon a set of essenti al causal rclat1ons11ps an tn . -.
. . . . . ... ,. ( on of innovatiOn (Sa)Cr 198),
tnmmg role of technology and 1ts lnntted conccptua
1
.
l I
th ry has had a lnmted tmpact upon
Taylor 1986; Schoenberger 1989). Proc uct eye e co . . . . f. .
. f h' hliohting the potcnttal stgm 1CarKC
local and regional developn1ent polt cy apart rom
1
g t;;) d
. d f localities and regiOns to attract an
of cycles of industri al dcvclopn1ent and the nee or .
retain di ffcrent kinds of industrial functions and occupatiOnS.
1
.
1
... , en
. . O\ at ion and iv ar.,tan ur c
Bui I ding upon notions of Schumpetcnan tnn mwy of the pro b-
. , 198 ';) . fit cycle theory coun s ,
mcnt chscusscd below, Mark usen s ( - pt
0
. b. .
1
cost
T
h th ry moves C) on<. . t
len1s of the product cycle model. c eo . . . ulrket power and corp,)-
. . l , . I 1cnt by n ' .
explanations of local and reg tonal c C\ e opn .
1
. .
1
tri 'S .
111
d
. . . . . ! o t nt us c. ' "
1
rate strategies 1n the closely tntet t\\ tnc<. t: . . . . .. . beneath the macn)-k\ e
.
1
""vel ot 1ndustr tt..:s.
19g4 ). The theory focuses upon the meso- c
T(
nble 3. 5 Ths product life ,ic o;,n:-- Dec/--:- . ------
---- Growt!J. Maturity: tne

Sales
\Oiurne
IntroductiOn market mass
enlarges production
w
Geographical
concentration
,
,'
,
,
,
,
Employment
,
,
/ ,' Output

' ,,
' ...
.. .. ..
...
..

'
Demand
conditions
very few
buyers
Growing
number of
buyers
Peak
demand
Declining
demand
s.teep fall-ott
rn demand
Techno log}'
Short
production
Introduction
of mass
production
methods
Long-run productron runs and stable
technology
Caoital
intensity
Industry
structure
Critical
production
factors
Employment
Geography
Regional
development
implications
runs
Rapidly
changing
techniques
Low
Entry is
determined
by know-how
Few
competitors
Scientific and
engineering
sk1lls
External
economies
(access to
specialist
firms)
Agglomeration
economres
Few innovatrons
Some vanation
in techniques
but less rapid
change
High because of high rate of
obsolescence
Growing
number of
competing
firms
Increasing
vertical
integration
Financial
resources
critical for
entry
Number of
firms starts
to decline
High of large
of specialised
eqUipment
General stability at first
followed by exit of '
some
Management
Capital
Semrskilled and unskilled labour
Capital
Employment grows along "th . .
L
1
. . . . wt output Product1v1ty drives down employment
oca ton erther Initial plants R I t .
random (i.e. close to e oca of_ production to lower cost
home of in c R&D perrphenes ts permitted by standardrsat1on
inventor) or in re product and process
core regron g rmpelled by mcreased pnce competrtton
close to R&D Relocatron IS e1ther to less developed
and or lower cost peripheral regions
headquarter wrthrn core countries
functions
Highly
rnnovative
firms
High rates
of R&D
Skilled
scientific and
engineering
Shift to mass
production
Modern plants
with new
capital
Requi rements
for
Branch plant economy based upon low skrlled
and low wage production
Potential for rationalisation and plant closure
employment management
Some local engineering
agglomera. skrlls as well
:-------trons as semi -skilled
Source Ac.J . apted from Daw1ey (2003) -
. Storper and W lk
a er (1989); Markusen (1985)
-

CONCEPT S Or LOCAL AND

R E G I 0 N _A L D EVE l 0 p M E NT
Table 3.6 Profi t cycl es and regional d
1 eve opment
-
swge Profit stage -
- Locat,onaJ beha
Zero profit: the initial btrth and C VIOur: spat1a/ succession
II
Ill
IV
v
destgn stage of an mdustry. oncentration: often .
related to locat arbttrary locations
Super proftt: the era of excess profit A ton of mvention.
from temporary monopoly and gglomeration prolf .
rnnovative edge. St7e of the in
1
eratton and growth in
tendency to and \heir
Normal profit: the stage of open
entry, movement towards market
saturation, and absence of
substantial market power.
Normalplus or normalminus profrt:
the post saturation stage, where
either successful oligopolisation
boosts profits aga1n or predatory
and excessive competition squeezes
profit.
Negative profit: the obsolescence
stage of the sector.
force, to them at th . d_ and a labour
. . e tnttlal stte.
Dlspersron: firms grow .
numbers. Attempts to SIZe and decltne in
new markets. Sttes f I xpand and locate in
such as labour b o ower factors costs,
as oligopolies increasrngly attractive
increases own and competttion
. Increased automatton In the
process allows lower skilled labour
ocated and utilised. These locations
are relatively remote from the core' .
Relocation: certain sectors may have been
spattally retarded by the centripetal forces of
agglomeration. However, during the onset of
a decline In profits these sectors may
relocate at an accelerated rate in the latter
stages. If this dispersion occurs in
conjunction With cuts or new plant formation
then relocation w111 occur. '
Abandonment: production retirement as
quickly as possible e1ther through plant
closure or relocation to cheaper sites.
Sources: Markusen (1985): Dawley (2003), adapted from Storper and Walker (1989)
of the economy and above the micro-level of indi\ iduals and firms, and attempts to
construct a historicall y dynamic approach. Table 3.6 outlines five st:quential stages of
profitability and competitive structure through which an industry \vill evolve with gener-
alisable patterns of empl oyment, locational beha\ iour and local and regional dc\clop-
ment in1pl ications (Markusen 1 985).
Technological1y dynamic regions start with a fairly competitive stage in which exter-
nalities beyond the fi rm and industry arc important then progress to an oligopolistic
stage don1inated by large fitms as products mature and technology diffuses to
areas. Innovators earn monopoly rents from the sole supply of new good and scrvrccs_
h F. t. locatton is often the result of
m t e tnttlal penod of super-profits . 1rm or mnova tOn
h
. . . . .
1
b f h c der Co location occurs to benefit
tstoncal accident such as the tnttta ase o t e 1oun -
.c: . 'II d labour pooling \ew entrant
rom the externalities of technologtcal spt O\crs an .
1
fi . d may be drawn to the sttc
competition erodes super profits and creates no1n1a pro ts an ... .
. . . . . . r , , blc tO the tllll1 SlZC
of the tntttal tndustry's 1nnovat10n or reg10ns .a, oura . ..
1
...
1
. . n underpm the gt:ogt ap 1\l:.l
growth, concentration and consumer market oucntatto . . ..
k t and poltttcal power.
concentration of oJigopolistic firms that exert mar e ' . .. , .l, .. lf
T , . n undcrpms the t:mt: rgt:nu.: t
Eventual market saturation and destabt tsatJO dd. .
1
profits indudinc,
. . . ch for a tttona '. e
ohgopolistic organisational forms dn\en to
-
81
82
- - -
0 F UNDERSTAND I . ._=--=----
FRAMEWORKS
.
1 1
cr l'lbotu cost inputs or rnorc fh:xibl e
11 I f r htr\ c ' O\\ ' ' un.
d
c'ntralr arion in -..care
1 0
(.:
1
t
111
decline tn the face of substitute prodt
c (.; fit rc..;u h n J cts
unron labour. \cgati\C pro . t, J with the dbandomncnt of locatton f:tc 'l
d
mpC'rl' t,;( J c I-
and or an r J tl' rbilitv to cope wrth cornp ex pto<.:c"'e' of ind
. ...
1
t t' rheorctrcd t.:\ "' . lls-
itrc,. Dc-..pttc 1t fL ,! n . . . .
1
. thcon ( chocnbctgcr 2000), cr ntcr,rn
01
l)nt
r'd to prodm;t l)t c . . < It
trial change compa (.: . Jnnce upon ,1 ....ct ot cs,cntral Cdll"-dl
, .. ha locustd upon tt :-- '(.: ' . . , , ..
cycle thcot)
1
'dll"' tl proccss frotn pctrt tculctr tt.:tnpor c1l and snaf
1 . . . r l!cncml! .. atwn o c ' . . . ,, 1a
rh athtmctJOn <; d t lmut d contc\tualt ...atron ( Storpcr J 985 ). 'vVh ri c profit
.. . I . rcum tancc an ' l. . . .
t
1
h.. tcntiaJ for in ten cntton, tts tnflucncc upon local 'lnd
cvclc thcot} rc\cafcd t t: po_ ....
. . I polrc'' been llmltcd.
rc<rrona ., '
=-
wave theories
. . . the late nineteenth ccnturv. tnacro-technological Jong-wave theories of
Ongmatmg m .I
1
t d elopmcnt ba cd upon rnJcro-le\ cJ technologtcal sh1fts revtved following
caprta 1 C\ .
the tructural change dunng the l,tte 1960"t and 1970s. Long-wa\ e theory retatns a focus
upon mtemal change within rcgwns a. the e-<planation for local and regional develop-
ment (1\Jarshall J 987). Drawing upon Kondratie\ 's description of fifty-year long wa\'es
in comnwdity price cycles (8an1ett J 997), Schutnpetcr's (I 994) theory of long wa, cs
pro\ the theoretical basi . Each long wave is underpinned by a progressively more
ad\anced techno-economic' paradigm. As Figure 3.7 illustrates, each has its own
distincti\ e geography of local and regional de\ eJopment - the current being the fi fth
Kondratie' based upon microelectronic5. Transitions behveen long waves occur through
a proce!) of what Schumpeter called creative destruction': cause a
'bunchmg of and timulatc entrepreneurial activity to lay the foundation5
of structural change and a succe 5i\e 'techno-economic' paradigm (Sternberg 1996).
The initially narrow focu of long-wave theory was broadened to incorporate the social,
political and institutional context (Freeman and Perez 1988; HalJ and Pre5ton 1 988).
theory echoes \!1arkuscn 's ( 1 985) profit cycle with initially competitive
markets otvmg way to oliaopoJy \ h th c. d' h
o o \ en e returns trom tnnovatton eventually tmmts
as the technological-eco d .
. nom1c para tgm matures. Crafts ( J 996) has explored a posstble
hnk between Schumpet 1 .
. enan ong-wave theones and the endogenous gro\vth models
dt scussed below with tr . t' b .
d' ansJ ton etwcen long waves as periods of local and regwnal
tvergence. In the context of d .
t un erstandtng local and regional development. long-\vave
t leory has been criticjsed th d . . .
and n . . or e etermmmg role given to technology and its Iimtted
unct1ona1Jst \Jews of . . . . .
1997) Th h . socJo-mstltuttonal processes (Hirst and Zeitlin 1991: Maleckt
e t eorettcal focus . . .
the ca ,
1
. upon macro-lc\ei generahsatton and abstractton as 'veil as
usa power attnbutcd t h . . . I
complexity and d. . .
0
t e mechantsttc waves neglect local and rcgwna
t ercnttat ton lndcc I f . 1 nd
offer a limited b.
1
. ( most o the long-\vave theories arc aspatta a
a
1
ttv to explain fi d 1 es
(Stcnlbcrg 1 (\9r.).
0
,
1
spcct c outcomes in particular ti tnes an P ac
7
' aw cy 2003) ( " . d
regional develop . JI\ en Its macro-level and h istoricaJ focus, local an
ment pohcy has dra 1 1 c-. t to
promote the condt r wn Ht c 1rom long-wave theory except attcmp s
1
tons or adapt t d ro
encourage the creat , . d . . a ton to emergent techno-economic paradtgms an
I\ c cstructton c f .
> rnnovatton and cntrcpreneuri ali sm.
CONCEP rs or LOC
- Al AN D p
G.ONAL DEVELOPMENT
Late 1780s
1850s
1890s
1940s
1970s
. Industrial Revolution
Jron, cotton mechanisatton st
UK (L
eam power
ancashrre, Shropshire Bla k C
c ountr";)
1870s
Rise of continental industry
railways, steel (Bessemer), coal. steam motor
UK (South Wales, North East England, Central
Scotland, Germany (Ruhr}, Canada (Ontano)
1914
lmpenalist expans1on
electric power, chemicals, synthetic materials,
early internal combustion engmes
UK (West Midlands, Greater London),
Germany ( Hessen)
1966
The post-war boom
electrical and l1ght engineering,
petrochemicals, motor industry
UK 0fVest Mtdlands, Greater London),Spain
(Catalonia), South Korea ( Susan)
1980s
The fifth Kondratiev
electronics, information technolog!'
UK (Cambridge. 'M4 US (S,hcon
Valley}, France (lie de France). Chrna
(Guangdong), India (Bangladore)
Figure 3. 7 Long waves of economic growth
Source: Adapted from Dicken (2003: 88)
1840s
1890s
1930s
1970s

'
CONC ! Of LOCAL
AND REGIONAL DfVELOPMENT
cati onally concentrated spatial structure _With . .
LO out tntra-ftrm hierarchtes
Control
Control
Administration
Administration
Production
Production
Cloning branch plant spatial structure - hierarchy of relations of ownership only
Control Administration
Administration Production
Production
Administration
Production
. . . hed and connected by relations
Part-process spatial structure - plants dtsttnguts
of ownership and in technical division of labour
Control
Branch
administration
and control
Administration
Production
process
segment
Production
. - .... . ""' . . '
- .. ' Rgure 3.8 Spatial divisions of labour
Source: Adapted from \1995: 75)
Branch
1 administration
j and control
Production
process
segment
85
Transition theories: the resurgence of local and
regional economies

11
d th" t'aalttft' C)f n '")-\.' growth thcor) to C\.plain \Vhcthcr the \IO\\'
owe t: .. ... .
d
. . e\ 'r ,
1

11
.01y: c'"':l\ smce the n11d- to latc-1970s \\as due
O\\ll Jno e.1 r t , ... . .._
, , .}
1
ano"" au
110
C\ or a n1orc tundan1ental ) ::,tctnJc transi-
ro t\C:ltul ll
n
10
l and renonal de\ dopn1ctlt 1 Duntord and PeiTon 199--l ). In the mid-1980"
uon a . 1. Ul ::. ...,.
the Jwled a\\ a)' from long-tenn C\ olutions in regional gro\vth and decline ('vlartin
and unle\ J99c ). ln addition. the on producti on and technology of stage, cycle

and wa\ theories thcorie of structural change etnerged that sought
w e\pJain tanti\ e tran :tton m nature of capitalism and thei r impl ications for
tocai and regional development. Ccntrdl to the emergent themes \Vcre specific forn1s of
local and e peciall) regiona! whose particular sociaL technological and msti-
tuuonal foundation had underpumed relatively faster gro\\ th performance (Scott 1986;
Becanini 1990). oe, dopmenf became an of the extent to \\ hich local itics and
reg1on could ape the d1araLteri ric and relative economic success of exemplar types
of 'mdu trial diwrrict - \'. hether craft based (Third Italy: Holl y\vood, Lo5 Angeks).
high-tech (Silicon Valle). California: Rhones-Alpes. France) or fi nancial centres ( C Jty
of London: \\ all Street. \ ew York). ' Re')urgent' regions became the focus of local and
regwnal de\elopment theory and policy ( Storper 1995: Scott 1998).
Flexible specialisation
An earl' and influential in tt t. 1 . .
. . . , . s J u tona 1st transttton theory focused upon the 1dea of' mdus-
tnal dn Ides - S)'Stemtc di sc t . . . . . .
. on m the soctal orgarusatt on and regulatton of
production - between the d .. 1
pre-m ustna era and mass production and then from the era
of mass producti on to ft bl . 1
. . C\J e hat1on (Pt ore and Sabel 1984 ). Each industnal
penod v. as associated \\ ith d ..
Fl . 'bl:) . . . . a bttnct geography of local and regional de\ elopment.
ext e herald d -.
reoion
1
d .
1
. . c a return to the Industrial characteri sed by the
e a m ustna t . . 1 b
captured th . . . . n ) ptca efore the regional functional specialisation -
m e spattal dtnston of lab
examples [!o d . . our approach - of the mass production era. Concrete
cuse upon mdustnal d . . .
rigid. infte 'bl d . . m Em1ha Romagna, Italy. Contrary to the
, XI e an ven1call y mt 1 d . .
densely focal d egrate socwl organisation under mass production,
tse networks of sm 11 fi
changing
111
arkets ft .bl . a . nns could respond to di fferenti ated and fast
m ext e :)pecJal . "'d d 1
' an adaptable \vays (Hirst and Zeitlin 199 ).
CONCl PTS Or LOC
AL AND RE
GIONAL DEVELOPME
i NT
\
llical dts tnh.!gmt ton ant .
11 '- . cou < reduce t .. .
btl i t)' and rt:duce utH.:t:t1amty buyers,
1
.
1
'-'
11
SattJOn costs provide fl
t . . . . ,mt suppl tcrs
1 1
. ' cx-
f lk:xiblc for local mdustrhl . n po tcy terms the potc t.
1 o . . . . ' for lab . . . , n ta
. ,r
110
rate power appealed to poltttcall y 1 eft p
1
. . our and agamst monopolist'
"' . . . . o ttlcal administ , . . tc
for l!Xalllpk the Gtl;akr London (ounl:tl (Best 1991 C r,ltJons dunng the l980s.
. teddcs and Newman 199<) ).
Transact ion costs and 'new industri al spaces,
Building upon the transaction and external , , . . .
. . cconomtes traditions f .
omi sts and Wtlllamson, transaction . t
0
cmmcnt ccon-
. cos s and nco-Nlarsh' II. h .
of regional agglotneratton and growth developed
1
. l . , <l tan t cones
. .. .
0
cxp am the formation , d .
of the rcgtonal resurgence of new mdustrial spaces (S
198
dn
d
. cott 8).lnthccontextofth
break-up of the tnass pro uctton and consumption model f F . . e
. . .
0
ordtsm. mcrcascd mark t
unccrtatnty and fragmentatton coupled wtth technological h . e
. . . . c ange were tnterpretcd as
unden111t1tng Internal economtc5 of scale and scope (Storper and \V lk .

1
d. a er 1989). Hon-
10ntal and YCrttca tstntegratton and the contractino-out or ext
1
. f .
. . . . . c ema tsat10n o productton
fo tered the ft cxtbthty and adaptabthty necessary to cope with f:ast h d'f'
. . . . . c angmg. 1 teren-
tiated demands and to avotd the ngtdtttcs of previous fom
1
s of soctal .
. -
t 87 . - ..
. . . orgamsat10n.
externalt ttes tnarkct pooling. specialist supplier availability and
technologtcal knowledge provided local economic benefits for firms in
similar industries and underpinned geographical agglomeration. This geographical
concentration was particularly useful and efficient for transactions that were irregular,
unpredictable and relied on face-to-face mtcraction. Such externalisation and agglom-
eration laid the foundations for the formation and de\ elopment of territorial production
con1plexes' or geographicall) concentrated production systems (Storper and Scott
1988). Citi es and regions \\ere interpreted as active and causal clements rather than
passi\e backdrops in the economic growth process (Scott and Storper 2003). Local and
regional development focused upon the extent to which localities and regions were
cxhi biti ng the characteristics of these growing and economically successful places.
The ideas of increasing returns and positive externalities central to this approach are
echoed in the extended neo-classical growth theories discussed below. Echoing the
broader conception of 'development' and its increasingly international reach across
d' d Chapter J agolomera-
developed, developing and trans1ttonal economtes tscusse
111
- . o
1
d b. taus constituent of
tion has ince been promoted as a fundan1cnta an u tqut . ,
. . .
1 1
f per captta (Scott and
developtnent In economi c systerns at varymg C\ e s
0
Storper 2003: 58 1 ).
Regulation theory and the transition from Fordism
. . . from Fon.Jism tO\\ ards a more
The tnacro-scale regulation approach interpret a ft c,iblc accumulation
. fter-Fordtsm or e\en . .
ftextbl e era called vanously neo-, post- or a . . and mode of social n:gulatton
and its co-stabilisation of a regi1nc of accumulatiOn d
1997
) \ sTable 3.; tktJi Is.
d T
. k 11 1995 \1acleo . . . . . 1
(Scott 1988: Dunford 1990; Peck an tc c ' . .
1
oliticul and instttuttl'Hla
. d. t cconomtc. socta . P . .
the dafferent eras have markedl y ' .er(;n . lino ecotll)tnll:
h
it is the regulator) coup -=-
organisation. For regulation t eory,
-
B8J.
I
0 f lJ N 0 S f/\ N 0 I N (,
F RAM \V 0 R f< S
d f/oxlblc ________
_;,_n __--- intllm pro(luctJon
;,
1
rdiSt prvdor.t/on (I.J ISC(/ on (COII0/11/t:S Ol SGOPt ')
n; >I Ill')
(lJtJsed on (
71 o production
',)rocluctton of twmoguneous goods
Ur;;tornlJtV nnd stcllldcHdl"ntron
,. 1.,) tfler stocks c.lllcf mventory
'quHIIty Gxpost (tcjucts and errors
dCtl.Ctcd Into) ,
ReJects wa concealed in butter
loss of production tunc of, long,
set up trows. defective parts. uwt.:ntory
bottlenecks etc.
Resource driven
Vcrtrcal and (In some cflses) honzontal
mtcgraton
Cost reductions through wage control
8 Llli.JOUf
Slngletnsk performance by worker
Payment per rate (based desrgn cntena)
Htgll degree ot
No or little on thCJOb tra1n1ng
Vert1cal labour organisation
No learn1ng cxncricncc
Ernphusis on diminishing workers'
responsibility {disciplining of labour force)
No job security
C Space
Functional spatial specialisation
(con lral 1sation 1 decentral is at ion)
Spatial dlviston of labour
Homogonisation of regional markets
(spatially segmented markets)
Wortd wide sourcing of components ancl
subcontractors
0 Statu
Regulation
Rigidity
Collcctivo
Socinlis.ation of w?lfvrc (the welfare state)
stability H1rou{!h multilntcml
ag,eements
rordist Pocluction (based on economics
or scale}
Centralisation
lntermty mtervention in markets through
rncome and price pollcres
I mil financed resea,ch and development
Industry led lnnovotion
I l<leolop.y
Mdsb C<JIIbUillf;llon of consumer tlur rtblc .
th( COIISLJIIIJ}fiOn SOc;it ty :l,
Modt llll&rn
1 Otdflty jot r uctur al ref orr
11
Soclullsm ton
Sour c: Addpt d from HarvL Y ( 1989b)
Slllclll OcltCh J)W<I\IC\1011
F 1exib1litY ctnd Slllclll bdtCil prodU<; tion of n
"ar1C:t\' of V' uduct typ( "':
No
Qttrllity contiC>I pc1rt of proco!:'ls (irnnwclintu
de toOt loll of C't ror s}
tnmaudtdte reject of dcfoctiVC' pru
Reduction of lost tune, dmllntSiting 'tl1e
porosrty of ttlc work1ng dny'
oenaand clrtven ) vcrtrc(rl intoerntion
subcontracting
Learning by <loing integrated into long-tcrrn
planning
Multiple tasks
Personal pnyrnenl (dct;1iled sy'>tern)
f:limin<ttion of job demarcation
Long on-the job train
Mow horizontal lclbour
On tlw JOb leC1rning
on workers co rcsponc.ibll1ty
High omploynwnt s0cunty for core workPrti
(lifetime employment)
No jot) security rtnd poor lubour conditions
for tempornry workers
Spatial clustering and agglomeration
Spntial integration
Lubour market diversification (in-place
market segmentation}
Spatial proximity ot vertically quasi-integrated
f1rms
Dercgulationjre-regulation
rlcxibi lity
Division/imltvldualisation, local or tirm busud
nogotiation5
Privatisation of collective nocds t:md c:;ocit11
sccwrty
International dcstabilisation; increflsed
geopolitical tensions
Just in-time production (based on economies
of scope)
Decentralisatiot'l and stwrpcmccl interregional/
intercity competition
rt.w 'entrepreneurial state/city
D1ruct 'itntc intervention in mcrrkcts through
procurernont
rcrntorial ' rog.onul (ttl1rd pdrty form)
rinnnced <.md <.Jcvelop1nent
StClleled innovati on
lmJivi<ltt allsc. .. d con ")Lm lP1ton: yuppie cui ture
Post1 noclenrisrn
Spoc1ftcity /lltlapt at ion
lndiVtdU.:..tliSiJtion: the 'c, pr.ct("ICI</ SOCiety
C 0 N <.; 1 1, 1 c- ()
1

- .._ , . I OCI\l
AND IH ld 0 NAL orvE LOPM
. ENT

1
1:\LhH s lhilt institution I\
,IIH , cl Y l!lllh\.:d 'lilt\ , ,
t.kspltC It s mhcn:nt \;ontradh.;tinns tl\:\,;k snctal\y c capitalist
()()(} ), 11\ th\.: I' . l \
,,ode \.:g\1
' "'' 10nal and growth \lt'l! int. ,
- \.: 1 pt as . I'
t )ll tl\ <; dt:ptl't: ol hctwcun tl . . . P.'-='h
111
g hmd,llncntally
' \\; Ol ganl'lil\1 r .
til l: r0g11l lllot y ll\St ltutmnal and soda I Still t . .
0
"
0
product ton and
lll l!S Wille\\ Sll )
\ Potl and rcguhnc the
Uvl;uttn cllld Sttnky \lJ9X 214)
Itt thi s rct'llhltiont '-l t thcoty, slruc\ltr<ll l!CunmHic an 1 . ...
1
,
1 . . \ Soct.\ c tang\.: has und' . . I
1
:ordi st ol nwss productton and consumption , l l . . Ctl\llllcl the
, . . , l , , .. . tcgu ,\h;d by national Keynesian
detnand mcnt clll( (Mttrttn and Sun\c:y \l)l)?) . .
. I . . Stt ong lli\\tona\ mtcroM
JllII Hl l!<: nH: nt a suppotttvc wdf11c stnc In ,
1
'
. , . . . . ' ' '\C W(ltlCt acro5s nation stulcs.
Thi s brt:ak-up h\t'-1 undctptnncd teg10nal growth rate div"'.,. .
1
: .
1
. . .
- , . . ct gene\;. oH mdustnal
rcJ! iol\s have derlttH..'<. l. Po'-lt-lnrdtsl 'lll!xthk production comt11 . . '
1 . . . \.:X\.:S mvc emerged
soci,dl y and dtsttnr.;t lrom the lordist growth (St
1
S '
. . . , orpcr atH ... cntt
1\JKX). lnst ltiii HHtal und strur.;turcs have shifted a more localisi.:d ctn
nl' Schunlpl't<..' ri nn Wor"rarism upon and innovation (.lcssop
2002). slate's rok now cnlouragcs inllo'vation and intcmational
and subordinates snr inl to l.:l'Onomil polk) a1ms. As we below, nation:ll vari-
ants of regul atory I'Cgillle!-1 CXJSt HS d1llcn:nt tlatiunal of Capitalism with
instituti onal st nH; tures and histories mcdi\\le murl! of nomic,
soci al, und cultural ehange.
Transition theories and local and regional development policy
In poli cy tcrtllS, thL' shared in transitio11 theories upnn thu of local
and re!! ional cconotuies has stimulat ed inturcst in intunwl or within.
or ' indi genous' naturall y occurring 'ckvulopml!nt from below'. hy ll'clllSiw
1 1 1 t I' 1 cmurgcd. As
tJon t hcones. n loca 1 and < L'VL' opmen po tl Y l: v '
1 r 1 1 ,. 11 tc tnoduction nl!twnrks.
dctmlcd 111 ( hapt cr S, poltcy ws o(.;USCl upon ocd Y ( l:l! . .
. .
1 1
1
k. ('
1
'l coor)cratton illld uonlpt\1-
local agglotll cratlon and ocn s o r ,
. . .
1 1
, .. g uHI adapt at 1on, tnrwvalton,
t1on as well as the lot:al capactty h> p1 omotl t.:.n
11111
' , l
. . .. , .. . I . , , . , 19()2 Cnoke ami f\ l otgun I ))8).
cntn; prenl:urslHp (Stohr I 990: Pyh;; .tnd Scngt:n )ctgt:
1
' ...
. . . . . . . I , local and r\,;gtona I duvcloptucnt
I he mdustnal dt stnd s model has been pronwtct.
1 1
. t
. . . . . , . ' ll, . tml h ln adapt to the shtfllllg cnntex
pol1cy hccause such dt stnt: ts arc Silld to be llcxl) c Cl 1; . . . , 1 luc-
. ,.. throu th then dlSIIllcgl,tlct ptm
of hcightcnl:d cconotui c; and tccl wologlcal chang<; g
1
w 'l!)J1IClfiChcs to
t . distinct I rmu t te II\,; '
tum networks. As we di scuss. argutllcn s tllv : . lllt'IS ntll'\Ctcd consid
1
1 ll the d1 tnct mo< t: ' ' .
endogenous growth thcnry. :I
1
HHi g
1

1 1
. licv len ning s
. - , I iII I Ill I o I po "
crable attent 1on. 1t has been lo1
1
g
1101
g .
1
. . ..shcl1 :md
. , r thl!l' . , ,
to particular local and n;;gtonal
1
'
1
. lt)()7) 1
. . . . () 1 I'N7; S11)1'Pl'
1
a . ,
one-sJzc-ftt s-all ' poll l'y transkr ( ll ud:-;nll d" . . . I' , . -silknthH1 '" lo nl ,,nd
. f L:i'JilsnttOII Ul t.I\CI 11
thorny i ssues about the rel ative
0
I , b \It the li trt t llll" l:
. oli c I dcllhctal t(lll tl P
regional dcvclop1ncnt uontinul;; to lH )
'
U '- 0 f R $1 \ 1\ 0 I "4 G -=-
FR ME\\'OR .,s o_F_
. . f transition theories .
The
0
. . t .md tkh.tk' dunnc. lhL' Jl>Xo-.. .md Jl)lJO
wlltt'd l . l s
1
. -.rtlt)rl rh 'l)fll.'!> :-till .. . , rl '\.thk natufl' ol tst .H.cumul.tttnn w
r.Jn Jl)l)-J) I he mot t; t
1
S
{
, rrkr Arnrn .
1 1
th 'tHl'lll'lll ( ll.tn l') I9XlJh). ( tve
( H. t l'l)Jll't:pt lhl ,Hll I. n
ltP' h .wrccd but not
1
llld rd ltt\ t of gcogr.tphrctl
=" . - f h l)f C\.pldrtalll'll .
thea p.lrttcular om t , t ttnkd to c.1pturc dlld pla111 the complc'.it) ttnd
t Hl 1,1\ l " I .::-::- .
c,pr6:'tons. tt
1
i. ,
1 1
pntcnt. 1 ht' , aluc l)f the t1 nns tttnn model
f I tnd ( l \ t; l . h.
dl\ t'n,rt: o ' "' .
1
ntturl' of t.\tpttalism and tts geogrnp tcs of local and
-. . . the tiC tllll ..
url)n =-htft:., tn '
1
.
1
, n
1
'rnuncd (Sunk) 2000). frans1t10n model s have
J
th h n hccn .... tc.l{ t \ u l l
rcgJOtM gro'' '
1
th, role of broader structures and unable
... I'd '1'- tn crh l'l' up'-m :;:,
been re' l
3
t ' t , wd c,
1111
,,c 10 local and regional de\ elopmcnt (J
i
t ,I\ to C\pl<i' n CtUtlntll \ ' . .
.t< cqtM t .., )) h. ... tu-..c.:- of the simplistic and duahsttc 'before <tnd
J00l) For .ncr (lc.>'i'- t t. '" Vll . . .
- . : _,
1
vcd in nodcb. The tdca of clear breaks wtth thc1r
1tkr - anah ucp
0
Th 1 ld f I
h . ..,.
1
. b ''-'
0
.. much con\ 1ncmg. e rca wor o ocal and
rc-;po,dmg gco!rJp . ....: .... lJ. l . .
-
1
... .,. t . nuch me" !Ct more geographtcally unc\en (Peck 2000).
rc! wnal de\ e opmc n , . . .
- dd. . ,
11
...
1 11
o tcndc.1C\ tor transttlon models to generahse from a
In a ttlon to u1 c " ::: - . . .
. d f , ""' ,, I ( \faclcod 1997). further emptnca1 evidence has qu
hmt tc ::.et o t.:t . u t: . . . . .
ified and or the nature (1nd d) nam1cs of such tndustna1 agglomerat10ns. [n
particular. critictsm ha que tioned the1r reliance upon .small firn1 rela-
ll\ c Ignorance of the role oi larger firn1s. the geograph1cal stretching of thctr soc tal and
producti\ e relationship . the role of external and internal forces in shaping their evolu-
tion and the real! tv of their adaptive capabilities (Harrison 1994: A min and Thrift 1995:

Cooke and \lorean I99S). A clearer conception suggests there is a diversity of change
...
and e\perience <.hffcrent t: pe!> of local and regional economy (Martin and Sun ley
199 ). This ditTerenttation been reflected in the recent development of district theory
'''llh a '' ider 'anet) of The emergent concepts are more open to the comm-
genc) of particular cm:um tances and to the role of large fitms, state actors, local fi xed
capital and killed labour 1996).
Institutionalism and socio-economics
Dissatisfaction \\'ith the macro-structural transition theories and their deterministic
spatial has forged a recent change in focus to\vards the specific and partic-
ular a_ttnbutes of localities and regions and how these relate to thei r development
O\er time (Sunle) 2000). For local and regional development the emphasis has shifted
to 'the contingent cond't f .
1
. . ' 1
tons o gtowt 1 m part1cular reg1ons rather than on the long-
tel 1 f '
m e\o the ent1rc regional system (Martin and Sun ley 1998: 202). Rather
than focusmg upon the a ogre,. t d d I . . .
o ga e an c escnpt1ve statistical summaries of the outcomes
of growth, these kinds of th k d
r eory see to explam the underlying charactensttcs an
10nn of growth Jn particula d' . . .
r, Istmct 1ve local assets and economic capabi li ties indJge-
nous and endogenous ar .. t d
; . -' c
10
erprete as the basis for development and the foundati ons
or constructmg and establishing local and regional (Maskell et a!
1998 ). competiti veness
CONCEPTS OF LOCAL AND
REGIONAL DEVELOPMENT
by the broach.:r ' old' institution r .
. . tl Ism of Poh n i , d
1
')99 ) ,ltH.l '-.OCIO or the ' nc , . . y an Veblen (R. Martin
\\ cconomrc sociol .
. 1992: l991), the l!mcrgcnt I k ' ogy (Granovetter and
. . . wor has focu d
s of .... ocial actton m ongomg systems of \ <. .,
1
. sc upon th<.: embedded-
!lt.; S. leta relattons and th . . .
.
11

1
1 context of loca I and reg10nal growtt
1
(( rthl
1
e soc1al and mstltu-
uo ' I ' I) CI' 993 Pik'
?()() L Wood and Yallcr 2001; Hess 2004 ). Form
1
( . et. al . 2000: Macl<.:od
-
1
. a e.g. organ1satton
5
, d
. and mtorma (e.g. trad1t1ons, customs) in tt . . (\ mmtstrat1vc
sy. . s t utt on.;; arc mtc. . t d .
1
reducing uncct1ainty and as well promot . . tpl c c as mtcgral
o . . mg t1 ust m cconomi l .
di stinction can be drawn bet ween mstltut1onal en\ tronmc t d . c rc all ons. A
b
.1. . f l ,. . n san atrangemcnts to cxpla
the differing a 1 tttcs o oca ttiC() and regions to absorb . . m
. . . . . or create tcchnologtcal progr, .
which can. m turn, underptn in economic . css
. . . ormancc (It 'v1artm \ 999)
(
Table 3.8). InstttuttOnal context vanes gcographi call)' \\ nh d' .
lrcct consequences for local
a
nd regional growth performance and development. As disc d rh . .
. usse m '-" apter 4, mstttu-
tional structures flov. from and arc mfluenced by multilevel f
-> ms o go\ ernment and
go\ crnance shaped by dtstmctJ\ e nat1onal varieties of capt tal ism (Z)sman
1996
: Hall
and Soskice 2001 ).
The institutionalist approach interprets particular fonns of institutional organi sation
as the root causes and explanation5 of the conditions that promote or inhibit the growth
and developtnent of localities and More abstractly, socio-economics argues that
any conceptuali sation or understanding of the 'economic' is explicitly 'social' and
cannot be understood or explained except \\ ithin its social context (Grabhcr 1993 ).
Taking an institutionalist and soc1o-economic \ ie\\, markets arc not the free floating
phenon1ena described in neo-classical gro\\ th theory. Instead. are interpreted as
social constructs made and reproduced through frameworks of socially constructed insti-
tutions and conventions (Sunley 2000). \1arkeb are therefore highly differentiated
in their nature, form and local and regional de\ clopment implications. \Vhilc markets
theoreti cally provide efficient allocation mechamsm<; for scarce resources as depicted
Table 3.8 Institutional environment and arrangements
Theme
Institutional regime Nature of the systems
Institutional
environment
Inst itutional
arrangements
Informal
conventions
Formal conventions
organisational forms
Sources: Dawley (2003: 104), adapted from R. Marttn (
1999
)
Examples of institutional
expressions
customs, norms and
social routrnes
Structures of rules and regulations
(usually legally enforced)
Markets, firms, labour
welfare state, city councilS
.. F
RAMF. WORkS 0 . . t I I
F . . . . )JlltllOH tndrVIt ua l b\ <ltun
11
J.. t tadurt' '" t l
.
1
. i rhconc:-.. nhll '-
1
tll ' tt'nt but colkctr\ rrratton.tl Ill
In llt'{)- t I t 'lfHHHlf ,HH t: L . l: 11 -
.
11
n b"' mdn 1du.tl ' J
1
,
1
. ncttn L' <l firm rn<t) a prt.'lllturn to J)n \,
1 ' L- 1 '111 wJt\ J(Jlhl pt "t . u( 1
1, )f t''\,1mpk. lrt
111
' 't a...ur r(H tht'tr or tndustt) such tndiv'
1 lrcnr. ' t . ht It hour rndt 1\t: l' t<-
'riled \\l)rk.cr tn .1 tlg '
1
....
111
l)Jl'd tt tht' local -..k.tll, b,tsl'
1111 , l ="" . . ) I kc t '' c ' Ill ' , . . <.

11
h rarwn.ll.:lCfllHl tl .,- ( ' .
1
m,1rkct fatlurc <.:nll cctt '
u. ... prc..,'\Uit Ol t - \c
mflatt0nat') \\Jgt , . , '1\trnl'nt in publtL' &l)Ods (e.g. sk. Jikd labour ttn
1 . . . . . lsrancc fll untk r ptn tn . , .. . I . , , <.
tot tr , . , , hm)lo!.!tt's or pattt:nt cc1rrtct n1<ll kds tor srnallc.
. ) IlL'\\ c)cnu tl k c ... t
\'OCCltiOrhll tnlllliOg ' e
fimn ..
Networks, trust and social capital . .
. . and socto-econorntcs, networks have
rrmulatcd b\ the Jlltcre. t rn I . . . . d f . I . .
. . ,. .. i H,
111
tf c 10n11s o s.oc1a that
nxct n:-d dttcntton a mtt.: rmd J, l . . . .
. 1 , hterarchtcs but are cooperattvc and potenttally
ar .. nett her mar}\,ets nor { , 5l . .
fi
.
1
(. k.e
111
d J 99 ,). Cooperatl\ e and rec1procaJ net\\ orks are
murualh bene cia ( oo ' ._ . . . .
. b (\d relntotl' ... hlp bet\\ een part1ctpants. Thts enables mfonnat
10
n
tounded upon tn1 t- l .
. d tu Jl bcntlciJf action without the need for ttght1y prcscnbed
hanno an mu a ) '" '
. Hioh Iocalitie , and region arc interpreted as more capable of the rapid innova-
tion::: and adaptation amenable to de\ t.: lopmcnt due to co] Jaboration to share costs and
ri ..k C\change infon11ation and oh e problems (Saxenian 1994 ). Trustful relatioq
5
reduce monitoring and contracting co::,ts for participants. for instance fostering the supply
of cheap local credit and cooperati\ e labour relations (Sun ley 2000). In contrast, tow
tru t' enYironments are characten cd b) distrustful relations and necessitate highly
fom1ali ed contracts to go\ ern market-based exchanges. The adaptive capabilities and
'-
local and regional dc\elopment prospects of such places are consequently \Veakcr.
The ocial capital' engendered b} trust may underpin a local and regional collective
intelligence' and capability to learn and adapt successfulJy to change (Cooke and
i\1organ l998). There been an ion of recent \\ riting on the topic of soctal
capital and its role in deYelopment. While exhibiting a degree of common conceptual
concern (albeit frequently confused). social capital has been operationalised in highly
di\ erse \\ ays. often reflecting differences bctween (and within) disciplines ( includ-
ing economics. sociology, anthropology, political science. education) and diverging
normatn e concerns. Farr has attempted the following conceptual summary:
In a way both compact and capacious. the concept of social capital boils down
to networks nonns a d t L .
n rust. pon mspectton. networks prove dense and valu-
able. nonns pervade individual actions and social relations. and trust appears
psvchologically complex (Th ] d
"" us soctal capttal ts complexly conccptuah7e
as the network of associat ..
.. . . tons, acttvtttes. or relations that bind people together
as a con11numty v1a certa d

111
norms an psychological capacities, notabl y trust,
whtch arc essential for , 1 .
_ . Cl\
1
society and productive of future co11ective actton
or goods, m the manner of other forms of capital.
(Farr 2004: 8- 9)
CONCFPlS OF LO
CAL AND R
. DEVELOPMENT
I
hl! usc ul the term 'capttal' suggests the .. .
. . \!Xtstcnt:e of.
Hl -,octal capt tal that thts has sub . . . an asset. Much of the literat
< st,mtta1
11
npl' . ure
npn10tll , notabl y by hclptng the tnnovation procc .. h. tcattons for economic devel-
. k L t ss t tough low .
n intcr-ftnn networ W111c 1 can be a high!
1 1
. enng of transaction costs
t . . Y oca tsed proc . .
111
cnt of trust-ba'-cd rclattonshtps (Maskell
2002
) S . css mvolvtng the develop-
. 1 k f uth processes h
contributmg to a oc -In o wtdely supported b . . can ave a down-side
h
. , Ul economtca\1 . fr. .
(S;rctcr 2002). F-ort t<i reason the accumulatio f
1
. . Y me tctcnt practices
. n ocal soctal 1 .
cicnt to a1d development. r or development to pr , .
1
captta may be tnsuffi-
. . . . ocecu m poor com . . . . . .
benefits of 1 ntcnst vc tntra-communtty integratton . . muntttcs, the tntttal
must gtve way overt'
cxtra-cOJnmunity linkages: too much or too little f , h . . tme to extensive
. Ctt er dtmenston t ,
moment undcnn'Ylntncs cconomtc advancement (Woolcock
1998
). a tlny gtvcn
This problem has been conceptualised as the relation h b .
. . 1 B d. . s tp ctween bondmg bridg ,
and 1 ink1ng captta . on mg capt tal refers to networks D d f . : .... mg
. . . orme rom percetvcd shared
idcnt 1ty relations. Bndgtng capital refers to networks of ass .. t. .
. . . . . octa tons where the dtffer-
cntiating pnnctple of shared <.>octal tdenttty or status playc- no
1
.
.;l necessary ro c m deter-
' 93
mining the ana.lyti.cal clarity of these concepts they have proved
difficult to use tn \\ Lmkmg capital refers to relationships of exchange.
like in the case of bndgtng capt tat between differentiated parties. but in this case parties
are also characterised by power asymmetries. The significance of this analytical dis-
tinction for policy is that development becomes not simply a question of empowering
the poor, but also of managing the interaction resources held by external' agencies
which are present in poor communities (Mohan and Mohan 2002). Accordingly, positive
development outcomes occur:
\Vhen people are willing and able to draw on nurturing social tics (i) within
their local communities; (ii) between local communities and groups with
external and more extensi' e social connections to civil groups with external
and more extensive social connections to civil society: (iii) between civil
society and macro-level and (iv) withm corporate sector institu-
tions. All four dimensions must be present for optimal developmental outcomes.
(\Voolcock 1998: 186-187)
. . .
1
. . . f the con\ en tiona! neo-classical
In the context of djssattsfactton wtth the lffiltattOnS 0 . r
. . . . d . nomics seek to provtdc a means
theory discussed above, 1l1Stttutlonallsm an socto-eco . . . f l al and
. 'bl . ft r' factors m explanattOns o oc
of integrating analysis of the 1ntangt e
01
so e
1
t of recent economic
Wh 'I they form key e em en s
regional growth and development.
1
e d ,
000
. Clark et a/. 2000),
1
1999 Ba111es and Sheppar - '
geography (Barnes and Gert er . .
1
c. t neo-cla'\sical approaches
. d . d the tradtttOna locus o
such dimensions have rematne outst c .
1
f: t s are difficult to measure,
s fi ' less tanotb e. ac ot. . .
to local and regional developrnent.
0
ter . .
0
. c. (Sun lev 2000). nuh-
. . 'bl to oftictal data sourc s -
price and quantify and are often tnvtst. e _ ..
tating against their aggregate quantitative analysts.
1
. theorv discus. t'd abov has
. . roach of regu at tOn . . . . , . f
The economic and cxtra-economtc app potts and
0
. . . 1 and regulatory sup . f .. "ti-
influenced the focus upon the tnstttutwna . d Thrift s ( 1995} not ton HL
1 rticular Amtn an 1 . i r gional
local and regional econotnics. n pa ' . . the shat)int! of loca dm .....
. 1 n cxplamtng ' .....
tutional thickness' has been tnfluentta
1
- - .
M i
Historical trajectories and path dependency
. . 'ntral t\> HhtltutKHM.I and appt Ot.H;hc" to lo(,;
11
F' tnl.'0f) ts ... t . . .
-
1
J, ,
1
"'tll 'tll ( t+ .. l>"l an 1 \Vinter In thb C\ oluttotHH) <.lppronch, the
.md rt'!!ll>IM ut.' t' t . . .
- h . . . , .:
1
ltll', oH.'r ti: :h.' tn tcnns o1 htstoncal traJccro-
"1' 1)\\ \. .':"\. . .
fh ... t
1
.
1
1
1
tttm r-. rlort abic to the mdctcn11111atc. cotnplc\ and
1 . l.'.., r , c l) n ... l. p l ' ' '
l
nn . 1. rnture of lo al and :c;.!:onul de' cloptncnt: such grctdualistn
"\)n1 '( f11 o U ' ._ '
alf(''b bt'tter unde!'-Idnding of the t) :->'' L' f path and place dependent) through which
the :
11
-..wril'Jl gt>ography tt ;c-, future de\eloptncnt' (Sunley
_000 1 Path dependency. in parttcular. h,1, pro\ en an influential idea. It is a biolog-
metaphor that to the wa)' m which the C\ olution of a S)' tctn is conditioned
b) ir past htstof) (Arthur 1996). are not predetermined, however, in the
manner of omc of thc ;:,tagc. C!dc and \\ave theories discussed above. Local and
regional de,eJopment traje..;torie can be non-linear. Places can move forwards or back-
'' a \-\ell a remain 'ratic m c\.onon1ic and social terms. Places can change paths
too. ior the rap1d transition and fa t gro\vth of the late industrialising Asian
ltgcrs' - mcludmg Suuth Korea. J1 <:Lh ed m Chapter 7 - frotn the 1970s (Storper
et ai. 199. ). A. \\ e discu in Chapter 2. the legacies of place can be decisi\ e for
local and reg tonal de\ elopmcnt pn.\ and traJectories.
Institutionalism, socio-economics and local and regional
development policy
Institutionalism and socto ceo h ft d 1
. - ave m uence ocal and regtonal development
policy and. as '' e detail in Chapter 4, government and governance. In particular. the
approaches emphasise the rt f
1
. . .
" . . tmpo ance o ocal and reg1onal mstttutions and their ability
to de\t:lop e pec1ally d
...,cnous assets an resources and their capabili ty to foster
adJu tment to chang o
m;:, ctrcmnstances (Bennett et a/. 1990: Campbel1 1990 Storper
and Scott 1992: A min and Th . ft 199 ... S . . .
th d' . . n :>, cott 2004). The emphasis upon recogntsmg
e IStmctn e structural probJ . d . . .
.. , . ems an of localtttes, regtons and nat1ons and
constnJctmg context-sensitive de\ I . . .
Seers 1 9
67
) Th . e opn
1
ent policy has ht stoncal roots (Hirschn1an 1958:
. e promotton of networks h b .d .
prosperous and ld . d . . . as een t entlfied as a route to growth in both
o m ustnal locahttes d .
1998) 0 , .
1
. . an regtons (Cooke 1995 Cooke and Morgan
. \ er aps wtth the mdustrial d. t . '
evident too given th k . . J::, net model protnoted by transiti on theory are
e ey role that mtcrmcd. t . . . .
perforn
1
ancc Jnstit f . ta c tnshtuttons can play in their economtc
. u tons arc thought to sh 1 .
ities and reoions to , h . ape supp y-stde characteristics to al1 ow local-
credte t c1r own de d b . .
tnan Y gamtng market share and investn1cnt
IS or
I 0CAL AIJD
. RrC.dONAL DEVELOPMENT
1
... >Ill !'ivai places, usmg aggl omeration t< .
ll > Cl Cd\1.,! '\lld .
(
Sun ley 2000 ). Such b<H row from (
1
. ' sustam local indigent .
.. . . llntt; ( 1 <)(, 1) . >us potent tal
'd ''IS nf''compctttiVC and cluster' 1 ctnd, latterly Porter' (2C
I l,;' . tng <. tscusscd bel , s )00)
t ptcd mtcrventtons arc mtct an \ f ow. As Chapter
5
d'
> f .. .. .... <. ocus upon the su . .
1
)
11
-,c poltcy, stn,dl turn gtowth. tnnovallon and k'll .. pply-stde mc1udingcntc _
s ' s develop . r
nw) be nccc'isary and helpful but not sufficient c
1
mcnt. Such forms of polic
or ocal and Y
rcgtonal development.
The
critique of institutionalism and socio e .
conomacs
lnstitutiona1i srn and arc relative\ .
Y new approaches to l \
development. Much work remains to be undertaken . oca and
tn conceptual thcorct' l d
ical terms to explore their ability to understand and "' \ . Ica an empir.
\::Xp am local and r, ,
1
P
mcnt and policy (Wood and Valier 2001) Th. . . . cglona dcvcl-
o esc so-cal led heterodox' a
seldom as conceptually and theoretically coherent as the
1
. pproachcs arc
. . . . . y c alm and have been sub ect
to cnttque ( Lovenng 2001 ; Ptke 2004 ). The virtues of nctwo k c l
. . r s 'or ocal and regional
dc,clopment have been questtoned due to thcu generalisation f
1
. . d
. . rom tmtte case study
cYidcnce (Sunley 2000), the hmtted attention given to the relative b
1
b
. . . . a anccs ct\veen
coopcratton and compctttton and nvalry between institutions within and between
net\vorks, and the uncertain adaptability of dccentralised institutionalised structures to
dcYelop coordinated responses to economic change (Harrison 1994: Glasmeicr 2000).
The embcddcdncss of social relations in local and regional institutions can lock-in'
local iti cs and regions to trajectories of decline if the close and high-trust relationships
that once fostered their earlier growth and mnovation now inhibit their future adapta-
tion, for example the old industrial region of the Ruhr in western Germany (Grabher
1993 ). Institutional context may be a but not sufficient condition for local and
regional development. The relationships and interaction<; bct\\ecn economic conditions
and insti tutional effects remain poorly understood. The impact of institution-building
upon cconornic perfonTlance is ambiguous and little is known about the feasibility of
the geographi cal transfer of institutional frameworks between successful and lagging
localities and regions (Hudson et a!. 1997: Sunley 2000).
Innovation, knowledge and learning
. I b central ideas in explaining
Innovation, knowledge and leammg ha\ e recent) ecome . d h,
. I d \ elopment. on t c
and understanding conten1porary local and regJOna e d h bl ck box of
. t advantage::, an t e a
focus in neo-c1ass1cal approaches upon stattc cos h . cd .
1
connection
h approaches a\ e .org '
technological progreSS di scussed above. t e t1C\\ d } no (\loroan 1997;
1
1 knowledge an earnt ::: :::
to theories of innovation and, n1orc attcr Y
1
ent'
1
s
1
ntcrprded as
. , 2002). oeve opm .
Lundvall and Maskell 2000; MacKtnnon er al. d bsorb and utilise mno-
. ' bility to pro uce. a
the enhancement of the locality or regron
5
a
11 1
. tcrest in the role of
. sses Para e tn .
vattons and know ledge through learmng proce. , d spillovers is h.K)
I
. . . 1 ologlcal trans.er an
ocal and regional differenti atiOn tn tee
10
. d b
1
v (Feldman 2000).
. dtscussc e
0
'
tn the extended neo-classical growth theones ..
- 96 '
-- . --
O
F
FRAME\\
. . f the linear to the interactive model
lnnovatron. rom ,.. .
. .
1

1
. d r'tlional doptnt:nt hct' c sought to budd llJ)
anon m ocd an t..:::- on
\ppn.1,1ehes w Jnll
0
' . . n nion from the linear to the mtcract l\ c tno t
1
under.:, rand 111g Hl m < ( l'
the tmnsruon
111
. . d ,
1
tht' one-\\ J) tlo\\ ot and "'n)
199
.,) The Jwc<ll rno t.: t: . . . . . ',, _
(Lund' all - . , .,l tnis frl)tn tntttal tdca through dcstgn and de, ,
1
. l . ubhc and prn Jft or.::-< " . . l: -
ledge" It
1111
P . f ,
1
,
11
as Ftgurc 3. 9 t llustratcs. the mtcrncth c mod ,
1
, t ro productron an' sa c. r . . . . . l:
oprm:n . . . , i itcrlti' c nature of tnnO\ at ron an1ong tnstttuttons bet\, cc
r )hlinht the mtcra<.:tt\ t: am < . n
Hg :::
1
d taoc of tnflucnccd b) the tnstt tuttonalist anct
more do. ch mterrc atr ::; .:::- . . .
. .... h di cu. in the pre\ wus scctwn. thts approach sees mnovatton
socw-cconomtt: t cor) . . , . . .
. _
1
t ccun. m a varict\ oi gcograplucally dtHerenttatcd tnstitutiondl
d octal proces t 1tl o
setting!- ( \\ olte and Gertler 2002). . . . .
Th; linear model "as often mapped onto the ktnds of functionally spectahsed hier-
archtc, de en bed in the spdtial dn 1 1011 of labour approach. Certain types of regions
pedali. cd in R&D acti\ ity \\ 1th tB e 1-..nock-on implications for regional grO\\ th,
occupational srructure. wage k\ el and local and regional prosperity (Massey 1995). In
contra t. the emergent mteracttvc model empha ises the much closer interaction between
the u er and of "'nO\\ ledge. through spatially proximate co-location and or
facilitation by infom1ation and comn1unication technologies and Wood 1991).
Local and regional in titutional conte'\ts are therefore integral to explaining innovation
potential and perfom1ance. Some place are e\ idently more innovative and capable of
producing and adapting in no\ ation than others, reflected in their differential levels of
local and regional economic (ivtalecki 1997; Armstrong and Taylor 2000).
Social needs and the market
nnovation
Deve opment
Prototype
and
Markettng Market
production
.... ... and sales
- - ....---.. .... ..
..... . .... ...
.... "
... .
Technologies
Figure 3.9 Interactive model of I
5
ource: Adapted from Clark and Guy (1997: 8)
CONCEPTS o
F LOCAL AND
REGIONAL
DEVELOPMENT
Regional innovation systems
A
ial I itcrature dcvc\orJcd t
. . . . t o understand .
Hl C\cnncss ol tnnovauon and tts local and r . and explain the gc h'
t . cgtonal dcvelo . . ograp teal
nnovatton systctns approaches ha\c extend d pment tmpltcations N .
1 c to the subn . , dttonal
P
otenti al of regronal tnnovatton systems em . . attonal level to examine th
. . . ct gmg from . , . . e
,,orks capable of rcgtonal learnmg that cohe '\Ustamed msti tutiona\
' rc, endure and d . net-
Morgan Lund vall and Maskell 2000).
1
able
1
. a apt O\ er t11nc (Cooke and
' d ' k' . . .9 outlines the .
of 'strong an wea regtonal mnovation syst constttuent clements
. . . . ' ems. Here region . .
nali.tcd learning tnstltutlons (Cooke and Morgan
1998
. , s. are seen 'exter-
f 1 11 d
. 66). ln seckmg t
thi s phenomena o oca y an regtonally rooted . . o conceptualisc
. . '. mnovatton potential d
other approaches have 1dent1fied mnovative nlil' , . an performance.
. Jeux (Camagm 1996 . . .
(
Caste Us and Hall 1994) or worlds of production, (S ), technopolts
. . torper 1997) I .
1
.
and regional tnnovatlon, each approach shares a foe . n exp ammg local
. . us upon phys1cal and t h 1
infrastructures, such as 1ndustnal and un1vcrstty R&D d
1
. . ec no ogtcal
. . . an rc ated mdustnes and servi
htghly sktlled local labour markets, nsk capital availabTt ces,
. t 1 y as well as the support in)
social context of ostenstbly non-material factors such a
1
. g
. s reg10na techmcal culture
and know-how and common representational 5ystems (Storpe
1
9
97
. G
1 . . . . r , ert cr 2004) As
suggested by the tnstttutlonahst and socio-econom1c theories ab d' . .
. . ove. mterme tate mstt-
tutions play an tntegral role 1n reducing uncertainty and guiding the coordination of
collective action in an explicitly social and geographical process of innovation.
The knowledge economy
The recent emphasis upon knowledge in the economy and its implications for local and
regional development connects \vith the work on innovation. For some, echoing the
stages theory discussed above. economic de\ elopment ts a process of moving from a
set of assets based on primary products, exploited by unskilled labour: to a of assets
based on knowledge, exploited by skilled labour' (Amsden 2001: 2. cited in Cypher and
Table 3.9 Superstructural elements for strong and weak regional systems of innovation (RSI)
potential
Strong RSI
potential
Weak RSI
potential
Institutions
Cooperative culture
Associative learning
disposition
Change orientation
Public-private consensus
Competitive culture
Individualistic
'Not invented here'
Conservative
Public- private dissension
Firms
Trustful labour relations
workplace cooperation
worker-welfare orientation
Mentoring
Externalisation
Innovation
Antagonistic labour relations
workplace division
sweating'
. '
'Sink or sw1m
lnternalisation
Adaptation
Policy
Inclusive
Monitoring
Delegation
Consultative
Networking
Exclusive
Reacting
centralisation
Authoritarian
stand-alone
'
Source: Adapted from Cooke et a/. (1998: 1580)
Learning and local and regional development
d
... b htv of regions for de\ clopn1cnt is the capability
CcnrraJ to the a aptt\ t J
1

d II 19
Q? ) h a a coiJectJvc, soctal and geographical
ro k-.lm (lun 'a - ... . . ..
h tl
, ... ' t .
1
ch tnoc in an :ndt' tdual or organ1satton capabtltty or under-
t at e l:l. => < :::-
. tanding ( CooJ..e and \lorgan fl)9'",). Leammg 1 '.con central to the inno-
. . al)
1
n the ch .lnoino - detailed tn Chapter 1 of the pen ast\ e tech-
,arlon nccc.s J a :::- :::
nofogical change, particularl) in conununtcation and information systems, hcighiened
uncc;-raint\ olatillt) characten"ttc of contetnporary for rns of ' reftexi ve capitalism:

the centrality of Jeamtng for the innovation process stems fron1 the recognition
that the knO\\ ledge fronuer L n1oving so rapidly in the cunent economy that
HIGH HIGH
0>
c
lOW
Knowledge
Information
Data
Figure 3.10 Data, information and knowledge
Source: Burton-Jones (1999: G)
Q)
:J
-
co
>
LOW
CONCLPIS Of
lOtJ\L J\tJD
f<EGIONAL DEV
sit1lply access to, 01 <..ont rol ovl:r k ELOPMENT
. 99
. , nowlcdgc . . .
clHnpctttt\l! advantage. It tS the cap. alfords tn'"'
1
.
. . acny to learn h' . ere y a f1ectmg
1nn process and csscnttal for d . .
1
. w tch ts critictl t h .
. eve optng an I . c o t c tnno-
cnnlpl.:!t 1 tt \ c advantage. t tnatntaining .
1
.
' sustamablc
(Wolfe <.1
. . an <crtler 2002: 2)
M
ore ">cl 1-awarc or reftcxtvc localities 'tnd .
. ' rcgtons arc th
to adapt to cconon11c change, often through '\n. b.
1
. ought more likely to b". bl
. . . ' a I I t y to rcco ' . . . .... a e
and uncotnpctttt vc routtncs and practi<.:cc., (Cook. , gnlsc and d1scard outmoded
. , 'd , b c and Morgan 199o .
t
ionshlpS arc cvt cnt etween knowledge prod t . c). rcla-
. . uc ton, lcarnm, . d .
itics and rcgtons. Cructall y for local and regio
1
,
1
d. , g an forgcttmg for lol:a\-
I a cvclopmcnt \ . . .
to be enhanced through local proximity as rap'd k ' carnmg 1s considered
t now ledge tran [i.
g
enerate pos1t1ve local externaliti es for firms and
1
. . .s cr and application
. . ot ler mstttuttons (S 1
Critical d1scuss1ons about leamtng have animated d b- , un cy 2000).
. . e atc!:i about 'new reo. r '
discussed m Chapter 4 - and tts ctnphasis upon the . . , t)tona tsm -
. . . rcgton as the focu d
factor in cconomtc, socJal and political change (Amin 1999 L . san causa1
. h f . ovenng 1999) Over
lapping wtth t c concepts o networks and embeddedn d' . -
. ess tscussed above, Storpcr
( 1997) has focused attentton upon the non-market interrelat , .
. , . . . tons or untraded mtcrdc-
pendcnctes between tnstttuttons as central to local svstcms of . ..
. 1 mnov<1t10n, productivity
growth and loca] development. High levels of trust. tacit or uncodificd
kno\vledge and routine behavtours underpin sets of conventions at
1
d coord t'
1 . ma mQ rea-
tions that arc speci fi c to the context of patticular localities and regions. These
forn1 of i nterdependcncy constitute ' relational assets' that provide localities and regions
with the capability to learn and to de\ clop the unique and not easily reproducible
competitiYe edges necessary to stay ahead of the forces of imitation in an increasingly
globaliscd economy. As outlined in Table 3. 1 0, lean1ing and knowledge-creating regions
are distingui shed from the mass-producti on regions characteristic of Fordism in the
transition n1odels di scussed above.
Alongside regions, cities and cit) -regions too arc seen key bases of growth in the
knowledge and learning economy rather than just examples of its manifestation (Scott
2003 ). Scott and Storper (2003: 581) argue that 'urbanisation is less to be .as
a probletn to be reversed than as an essential condition of durabl e dc\elopment Ctttcs
act as the foci for agglomeration, posithc exten1alities and, for Florida (2002b) .. an cmer-
. . 1 rt t for local ren10nal and
gent creati vc class' that so1ne constder mcrcasmg Y tmpo an ' :;,
national grO\\th (for a critique see Chatterton 2000).
Innovation, knowledge and learning in local and regional
development policy .
I d
.,.. o tonal development. mno-
. t orar"\ loca an t
As emergent ideas in explatntng con etnp ;
1 1
,..
11
local and regional
. .
1
. , y a centra ro c t
vatton. knowledge and learntng current Y occup . d .. heterodox rather than
. . c often descnbe as . ,
development poltcy. New poltcy
1
onns rked break from pre' tous .tp-
h P
. k 2004) represent a ma . 1 ' , .
ort odox or conventional ( t e - . .
1
r cv increasing!) uwo
. I I I and rcgwna po I . . r k"
proaches. As we di scussed tn Chapter oca db d tclccommumcatton tn
. . . h as broa an
the con1bination of hard' sue '
\
'
\
'
'
'
\
'

'

'
I
\
\
'

'
'
'
'
' ,
'
\
'
t I '
\
\ \
\
..
\

'
' ...

'
\
'
I
'
\
' '
'
'
'
..
' \
'
I 0CAL
AND REGIONAL
DEVELOPMENT


AT (
...
Plat
.1. ...hnt110' poles: micro- nd n not .. 1m ltto'\ centre under
.....,nstnJctiL n In Gren ble:. Franca
,\\ I. . :t ' rlt
I U.ll b l ' \tt ... \\lth ._, \' ' l
rt f r n.:'t\\ .m
-
UHh \ .l! l 1 "',1'',. .U , 'f ' . \
k.\nuu;;. :,,,_- .......... min:-
tuillin..! .lui,, ...,,. uh-n .. ni
llh.'Ut tt l 1 \, \\. t' .: J{ h ,: -.,:.'
' i l \ l
t 11 '' .\,1

't-' ':,l u' .: :u
. '
.. ' .

"\ .. .. ..
tk ::-th... n "I

1 u JD
_n "th an l
....
"'n, .. m ..lf ' . .
lin in.: t
... . ' '.
' .. n .. n '' r .. ,_
-
- -

tn.!
-

'

... -
11
- .
\ 1 t
'f' ,,,,
_,,_ , .. . '
..... ...
...
... ..
... .. , ....
tt "l n ,
l '.U
.J it l
-
thl: '" t ,'"\{ ..
..:'\ '
\ ,\t l U f ., .\f I
1 nl r _

.. ' ... '

,,\r., ..... ..
-
l ' tt 'I

"" '
,;,... .... \.

't , ' . . 't' ' " . Jo

\o ..
.. .. ' . ..
-
..... t
... 't : '
. "" -

'
...
.... .
. ..

....
..
.. ....
' .
'
...
'\\

.,

. . ...
..
_101
..
..

- .
102
FRAMEWORf<S
OF UNDERSTANDING --
knowledge and learning in local
f innovation,
The crit.ique o evelopment .
an
d reg1onal d . , lt .
1
,)proachc.., to r1111o\ at ron, k.no,, kdg,
. d tflC ClllCH?.t:l 'r "'1..: :til''
. 1 pa Ill t.: ... , I I . t , u
(
. JtlcJ.slll ha:> ace.: on i, . I )pmcnt. for ...om c. '' t:dl\. ,uH U/ /) l'onccptuar ..
' 1 d rcuwnal t t:\ t: l I i . . Js,,.
I
, rnuH! in loca an ... . 1
1
thcon burldlllg. dr<. s of I.:\ Hkncc <lnd . ,
1 t:cl ... . d clear thrn"'ll1. .
tion has compromr. t.: .. , t> 'l\\ ccn Hudson LagendlJ k. 2003 Tvlurk.uscn 2003
I (
ecthctk:batt: t; 1 '
, wee w po tC) !) ,.
1
, line and k.nO\\ ledge accumu at ron rs rll \lib
' LJ'-'ll pO\\ cr o carr .... ....
Peck 2003 ). Theca d
1
b'lh.: For Sun ley ( 2000), has been a tcndenc\
.
1
d .. , --lopmcnt an <. c.: ' . _ to
ofthcoretrca t;\C . . , of convcntronal prrcc and cost condit ions d
h . n t i 11 ued unpor f,JI}(.;t.: . . ' ell)
0 ,t.:rlook t c co . . ,,ell as a H1ilurc to establtsh the rclatrvc positi on f
. d marJ..ct rdatwns . . o
c\changc an . . . an rather than contnbutory of economic growth
, "' i lcarnrng pnrn, . ' . .
kno'' Iede-t: . )f the claimed benefits of agglon1eratron and Joe ll d
n ' suspiciOn '" that man) ( se
lc
1
. .
1
(lc\ dopmcnt hen c been exaggerated and have "'Ct < b
, in , tor local anc rcgwntt . . . . J c
!cam. g d h, narrow e' rdcncc of thetr supporttng emprncal e'<arnlles
q
ucstroned bcyon t t: I , .
I t
,
1
atiornl central go' emment rcgu atton as well dS poltcv fo
(Amin ?000). The roc o ' . . . J. r
.... , , ha" not ah' ay. been gtven a sufhctent ly central ole
example defence t.: \pt:n . , . . .
. ?OOl) The ..:upporttng role of cultwc has often been dealt \\ rth uncnttca.ly
(Lovcnng - . . . . ,
. th ,r than that ts soc tall y and geographtcally constructed and
a a prc-gn en ra c . . . . . .
. d (S . tt IOO ') A.cadcmic co-optiOn mto the polit ics of poltcy-maktng around
contcstc co ... ... . . . .
. t. kno\:led"c and learning and the globahsauon-cornpctrt tvencss' rhetoric of
mno\ a 1011. ... t:
' new regionalism' has attracted cri tical comment too 2001 ). Since the produc-
tion and application of kno'' ledge hac; always been htstoncally central to capital accu-
mulation \\ hether anything fundamentall y new is happeni ng has also been questioned
(Hudson 1999).
Extended neo-classical theories: endogenous growth theory,
geographical economics, competitive advantage and clusters
Endogenous growth theory
Dissatisfaction with the or exogenous treatment of factors of production - popu-
lati on grovvth, sa\ ings rates. human capital and technological change - in traditional
nco-classical growth theory above has been addressed by a growing body of
work on endogenous gro\\ th model s (\ttartin and Sun ley Stough 1998 ). These
theories seck to incorporate formerl y external and independent clcn1ents into their
and e\planation of economi c growth. Connect ing \Vith the Keynesian
theon:s of cumulati\ c causat ion ab(n e, the dynan1 ics of regional convergence
md dr vcrnencc arc tl11' r f 1 d I
, o \,. ocus o cnc approaches to local and regtonal eve op-
mcnr. Devclor) ment ,s d tl . 1 fh th "Ortes
. \,. c as 1c reuuct1on m rcgtonal c c
attempt to Introduce incr c: to
. . t:astng returns tnto the neo-classical production 1unct10n
deter mmc l<,ng-run gnn\'tll ., t . I . . d S le)'
t c ttl cs wrt11n endogenously - the model (MartJn an un
1 !) )8 ). r ht.; .S lJbnat iOJ nl " J) t 't I f' l ' ' } ' 'es
, . ' "'
1
) o t1e rs the gcographtcal The t 1con
rctdw core elements of tl ,. , I , . .
l e nco-c.: ,tssH.:al approach and language.
CONCI:.PTs or: LocA
''l AND
Table 3.11 A typology of 'new' growth t heories
REGIONAL DEVEL
OPMENT
Augmented
neo-class1cal
-
-
Type of growth th
Endogenous
broad capital Intentional S
human capital chumpeterian -
Engine of
growth'
convergence?
Phystcal and Capital innovat1on
human cap1tal, investment. Spillovers from T h
ed . ec nologtcal
exogenous c t ucation and
ons ant returns t . . mnovation by
techn1cal through .ratntng
1

o 1gopolistic
P
rogress k
1
.nve. s.tments by
nowledge producers, with
universally spillovers. tndiVtdual agents. technological
available. Slow Cumulative Convergence diffusion.
and conditronal divergence, but dependent on transfer and
convergence shaped by to imitation.
within clubs of government Investment. Multiple steady
countries w1th public policy, and states and
spending and tt
srmilar soc1o- pa erns of persistent
taxation. industrial and
econom1c trade divergence likely.
structures. Possible club
specialisation. convergence and
-
catchup.
source: Adapted from Martin and Sunley (1998: 209)
As Table 3. 11 shows, different sot1s of mcreasing retums and externalities arc envis-
aged in the different models. Endogenous 'broad capital' models either emphasise the
externaliti es generated by capital investment or human capital and the 'learning by
doing and knowledge spi ll o\ er effects of technological change (Crafts 1996:
and Sun ley 1998). l n common with the modeL capital stock investment is
interpreted as a dri\ ing force of growth. t.:.ndogenous innovation models draw upon
Schun1peterian noti ons of innovation in their emphasis upon the potentially monopo-
li sti c returns generated by in no\ at ions and technological developments by producers
(Annstrong and Taylor 2000). for these models. human capital investment produces
positi ve spillover effects that both capital and labour productivity. Both sorts of
n1odels have been criti cised. Ev idcnce periods of rapid growth in localith:s and
regions may be preceded rather than followed by high rates of fixed capital
Technological progress is considered the result of deliberate choices and actwns rather
than a coi ncidcntal effect of other acti \ itics (Romer 1994: Blomstrom era/. 1996 ). Both
.
1
t tl , t r turns ma)' be constant and
models struggle to convince on thetr centra argumcn \a t:
increasing rather than (Martin and Sunlcy l99R).
d
g
hical spillovers
Innovation, technological change an geo rap
. , looical change and in no' at ion cndogc-
Most attention has focused upon makmg techno o , lassical theOJ"\ inter-
. , d. tssed above. m.:o-c - .
nous to the econornt c growth n1odcl. As "e tsct. . tl per C'lJ)ita but fall to
I I . , ng output gt ow 1 '
prcts technological progress neccssan Y < n\ '...
1
..
1
, (I cxrJinnation of gro'' th
. . I . I . 'rcss I he unc CJ ) r .. I
tdcnt1 fy the causes of t0chno ogtca P
1
og , rO\\ th thel)rv cxphctt Y
. . " . 2000) F ndogcnous g ... . f
ts not spclt out (Annstrong and I aylor J ... 'lies the
0
1
, ... I rogrt.:ss. It speCI
seeks to explain the causes of techno ogtcd P
J.Of . -
Of UNDC:RSlANDlNG
FRAMEWORKS . , . I I ,.. -
. th . growl h ll L lllO ogtc.tl pro" 1\!sc .
I . f1()\Uflllll 10 l: Q "I,
l I
)''ic:'ll charu!t: Hill rn . . .. gro\\ th. Jt b rather tha11 L'"'
r<:c ,.. tl.:d l,f cn,fl<lllliL . . . . ,,ogu.
b ,1h caw.;c and d .
1
. clividuals and Scl' th lllcL:Ilti\ c
n c .. Put sunp y, tn . - . tn
. , to the gnnvth pnll f't technological pn,gt thL't\.:forc lntcrwtl is I
rhlt.' . stkandpnlt, . . . 'Cl
)r
,<fLKl' nt''' or' l<'lll\''s tcchnologtral lronltcr ts Hllhnnut 'tcll
J l , The cCOI .. . 4 y
"ithin the grO'' th pro<.:l. :.. t"t to bt L'anH.:d tn the km,wlcdgc-produc
. bccwsc of the pn,
1
tng
outwun.b . , . ,, . 2000: 76 ).
t
fl tnd fd\ PI 1 f'
indu='try ru ' :
1
. r. . focus upon the rHunoer o wotl..et s in kno
. f . hrwlol.!tca ptog w,
E:\planar1on' o ttt: . .... .. t ., ol kllO\\ ,uH.l tt:<.;hnolo!,tcal transft.
. i the t; ,\ lllg .. l.:l
kdgt-prl'Kluctng uH l
1
lt'"'l\' <ll' cxtcrnall)' produced technology cnthou,e l
19
9()) x ogc no :- 'l
j o (Rumer 1 1
,tnd ( 1 uswn h . ,
1
,1 dt.tennincs a s HH> ogy by 1ts ctr
11
t
1
. . d. t"tn b\.' boug t-m ,u ' . ... . , d
1n capital goo s ' d. . be died technologa;al progress contnbutes to region" I
. , I contra t, t!'C m > - "
"tock 'mtagt:: .
11
d tlvofcapital stock. As Figurt.: 1.11 Illustrates. such di sem.
I d' mdepcn n .. .
growt
1 1
J'k ly to be J>roduccd in knowlcdge-n<.:h and creative environ,
b
d. d k
1
>wlt:dgc 1s mor(: I t:
o IC r t . "nd influence regtonal growth rates (Annstrong and Taylor
mcnts \an' between rcgwn a . . h . d
' .. . h thr in titutionalist and socto-cconornJc t cone\ tscussed above
JOOO) In common w1t . . . . . . ,
-
1
d'ng and foiiO\\'ing' localltJes and rcg1ons wath d1ffenng social
divergence bdWt:tn ca
1
. . . ,
. . r. t ng innovauon and gt owth JS a potent tal outcome.
capabtlttle!> ,or connecd
Endogenous growth theory and local and regional development
Endogenous growth theory has directly influenced Jocal and regional dcvclorml!nt
The geographically uneven rates of regional convergence and the spatial
of high- and slow-growth regions arc explained by the new economic growth
Human
/
caplUll
Public alld
/
private
tnvestm')nt
In educatiOn
Crca11011 and
tecmJcaJ
trCirr-...m""men
R&D
of lflnOv[jtiOfl
(:I pcndf'JJft)
0\ITPUT/
"-
Local and
LABOUR regtonal
..:
RATIO ocooormc and
wclal networ'f'.!l
Techno!ogy
OOlbocf:ed Ill
capital ttocl'.
>-
New cnp;tal Reg!anal
--
navmgs
\...
CDPIUilllaOour
WI;Q
Figure 3.11 Endoae
tt nous growth theory: the determination of labour product i vitY
Source: Adpated from Armstrolg 'ln<.J Taylor (2000: 88)
or IO
( 1\l 1\rif) REGION
, .. :, . Al DEVELOPMENT
I
. ril!S. Ncn-S"'IIumpclcttcttl approaches l!l
1
.
I IC', . np the . \ .
. tcdmolngt<.:al rnohility at lh. .
10
c of technological s .
11
111
2 1
. ltHl.:r-rcginn
1
. PI overs
I
{ dt tJ!.UC'l.- Posc 00 ). Sul:h mobility is not . I tt and lntcrnationl I
( ' , . . . cost css h< ,we . a sea cs
l lJ' ){>)- 1 k"lpttc the partly non-nval (non-comp 1' ., vcr and lcld .
I . I . . c tng) llld non-ex l d man
nnturc ol techno ogy ,m< mnovatton (Stot per l 997) . c u ahlc (non-exclusive)
1 . I , the return f
knowledge arc f!COf'rap 11ca l y hounded and the . . . . s rom the transition of
.. I I ()<. 1 . . costs ot trans . . .
di stance (.l,d fc el a . ) ). In combmatlon with the tr .1. lniSSton mcrcasc with
. . d. l \ aultumal aggl< m .
, ,d cxtl:.; rnalt llcs Jscusse<. a 1ovc, the cmplnsiL
1
1
eratton economics
,It . , , .-) upon 1lllnan c t .
Jcadcrshi p In cndogcnou ... growth theory suggests: apt u\ and technological
T ogcther, these type() of in<.;rcasing returns imp\ tl . . .
Y lal 1 eg1onal dev 1
hi ghl y path dependent; tcmrorary conditi()ns and h k c opmcnt IS
s oc s, as well as h' t 1
accidcnts'. may have permanent effects as patterns f . . . . IS onca
. <> spec1altsatton of ceo
001111c or cconom1c backwardness become '1 ck d . , '
. . , ,
0
e -tn through external
and sclf-rc1nforctng cf1ects.
(Martin and Sunley 1998: 21 1)
The extent to returns and spillovers arc geographically based at partic-
ular nnplt.es a. role for institutions and policy to capture and shape
the kinds of mvcsttncnt that m lght m flucncc these elements of local and regional growth.
Fiscal poli ci es and public infrastructure as wdl as the resources and incentives for tech-
nologicall y innovative sectors have consequently received attention (Martin and Sun ley
199R ). 1 n common \Vith the institutionalist and socio-economic theories di scussed above
and the content of Chapter 5, ctnphasis upon the endogenous dimensions of economic
growth has shifted the focus back towards the mobilisation of indigenous potential at
the local and regional levels (Goddard el a/. 1979). Geographical differentiation marks
the uneven appropri abi 1 ity of tcchology and innovation. Lagging regions can suffer from
a 'growth 1 in1bo, bet ween insufficient '-11/t and capability to generate returns and
spillovers frotn invcst1ncnt and a limited capacity to appropriate spillovers from more
advanced loca I iti cs and regions (Rodrigue;- Pose 200 I). The context and extra-local
connections and fl ows arc critical, however:
k f:
.. t
0
vth including human
Endogenous growth theory makes the cy acto1s o gr \ ' .
. . . l t tl . production functwn, not to
capital technology and cxtcrnalttJcs, tntcrna o lC .
' . . . . r the theory underlines the
lu<.;al or even nati onal economtes. On the contra Y d,
. . I ( I b I) flows of goods and kno\\ c ge.
importance of nati onal and mternatJomt g
0
a .
1
,
19
98 219)
(Martm and Sun C)
Endogenous growth theory and local and regional
development policy . 1
t nthl within localtttc. am
. tl development po \,; c I
Theoretical cn1phasis upon rclc.;astng lC ,
1 1
..
1
ims of I neal and rcgtona
. 1 d has rcfucuscc t 1C ,
regions for their own and the nat wna goo
policy:
l
. otlt:n 110 ltHlgt'r constdcrcd , t t
1
1, ltlplllt'llt po t:-. . . . , 0 t lc
. 1 111 1 rc' 'lon.tl < t\ t tlt lt ll1d\ r('qutr(' n .. ' dtsttrhutton trom a l1"tt
l ('l'-l , l .:: I t lnd ' .. . . "' onal
. J . of pwblcm lotd
1
;
1
HlOl -ft'ctpicnt rnodd. rc<.ilrccttng gru,, th f
. . . , l rl ' { l ' , ... ' , ' \;;: , I Ofl1
'II II !Ius ( ,lll n ( . ' I ') llu' lllOdcl ha' bccn c lilt c I tor Its fail
n . ' ,, ft'''iOII" (I-t gun.' "' - . . . . . . , ure
,,nm wg w lagglnt- I ,w no r its htgh cost and It s tnabll tt} to red
z: , 1 Ill :::- ..... . . Js,
ro strut tum P .
1
, lHLltn\ 111 tht' context of an lt1tcrnatt onaJi'linn
thin the n.uwn,t tU . . o or
rrrbutt' grv'' th "
1
rl lrt , 111 --d r('tdonal poltc) to ratsc the econon
1

Th ' llt'\\ !!fO\V l-l l ... . IC
t
1
d, -p 'rrt)rtnitH! regions to contnbutc to the growt f
. " f ,, o,, HH! t/IU un t t \.. - . . . o
p,rt,mn.tncc
0
"'' . -. 1 .. ll11\ ( h!!urc 3. 12 ). '\e\\ economtc poltcJcs fOr
"' 'l ' 11 rco wn Jnd tht'tr natWtlJ. .. -
t.t ::-
The donor-reclp ent model
Grow1ng core
reg1on
The grov\1h-onented model
Growing core
.
reg1on
Lagging region
Lagging region
Under-performing

reg1on
I \
\ I
Under-performing

reg1on
Figure
3
-12 Donor-recipient and growth-oriented models of regional policy
Sowce: Aut11ors' own research
CONCEPT S or L
0CAL AND
. . REGIONAL DEVELOPMENT
. ,. rc.1cuscd on all rcgrons wrthm national , . .
. (A fh
f othcrg lll 2005). tl , .' u . auscr eta!. 2003: Scott and
. . d I ' 1e 'rf
) rs cons rdcre t 1c to enhanced <.:,.
0 11
. pc ormance of each te _
tot . . . "' ornrc outcome . . 'n-
, tl nnal levels. I hrs approach rs oft en {;Ontr t,
1
. s at the local. regional an(\
ll cl . . . as e( With the tr d' . .
r .... tn butlllg growth from prosperous to la' . . a lttonal regiOnal policy
o ggrng regrons - 1
1 'le,clling down attcr Y characterised as
The critique of endogenous growth theory
Endogenous economic growth theory is not without it . . .
. s cntlcs, partrcularly d
dhercncc to the neo-classtcal cqull 1brium framcwo k d. . . ue to lts
a r tscusscd above (Martin
1
Sunlcy 1998). Endogenous theory remai ns wedded to the t d d . an<
. II . s an ar neo-classrcal assump-
tions about economt ca y rat10nal agents full y knowlcdgcabl f'.
1
. .
. . . . c o a tcmatl vc chorces and
the consequences of the1r The Keyncs
1
an and Kald . . .
onan cnttque d1scussed
above is relevant too. Endogenous theoty focuses on the supplv-sid d . .
. . - e an g1ves relatrvely
ll.ttl c attention to the demand-s1de of exports and btlancc of pay .
. . ' mcnts constramts
on empl oyment and productlvlt} (McCombie and Thirlwall 1997). The Ycrdoorn
effect is largely ignored as a source of increasing returns as rising output generates scale
economics and raises producti vity (Kaldor 1981 ). Other problems in relating endoge-
nous growth theory to local and regional de\ elopment concern the limited empirical
evidence of how increasing returns operate in l)pecific industries and places. the inability
to address hi stori cal change and to account for shifts and reversals in rates of regional
convergence (Martin and Sunley 1998). Endogenous theories can also be weak in
addressing the (historical) social and institutional contexts - conditioned by geography
and place that shape the operation of economic growth processes. As we discussed
aboYc. such concern are central to the Institutionalist anci socio-economic theories of
local and regional development.
Geographical economics
Drawing upon a new Keynesian critique of the neo-classical approach,
economi cs focuses upon the role of localities and regtons m tradmg h
. . . . . G raphical economtcs ts conccrnc \\ tt
ancc of industnes \Vttlnn part tcular cog
1 1
. d
. . . d trade and their implications for uneven oca an
national economtc prospenty an
2003
) Development' is
(M d 2ooo Brakman and Garretsen
regional development ear on . h h ced regional and national
. . . d penty throuo en an
mtcrprcted as 1ncreased tnco1ne an pros . . f tg of the
. . . I 2004) The model cnttques exts u
cornpetttt\cness (Kltson et a . as of method-
. . h but relics upon tts core ' . fi
vancty dtscussed aboYe approac cs . .
11
; rational indivtduals. pro t-
c. . fl 1atlon economtca )
ological individuali sm, pen ect tn on1 .
maximising finns and exchange (Dymskt
1996
).
New trade theory .
1
-
1111
) rtcct
ld
.- n notiOnS o J
. K sian and Ka ona b. d \\ tth
For geographical economtcs. the cy ne. . f detaikd above - com
. . d , . al economt cs \\ c
tltton, increasing returns an extet n
-
108
NDERSTANDING
AM EWOR <S OF Ul_<=""
FR .. fJ)Omh: track - .lh.' tntL'fPJ\.'k'd as llntk rrnj .
_J -..trv .tnd ulU ct-l.l) - l , . . ,. '"' . lll ng
th in Jntr:Hilull - . ' tlh tnl,H!t' ,mJ trctc c ts,ttton. Ri ard
dtl' gn)\\ J )J t'lllllJMf'tttiVt ' ... . . c l) S
cfT'"ic&JI mode l tition 1nd rhc rddtt\ c: trnrnobtltt\ of siunifl
the n 't> ' . . , f K'rtt\.:t nHnp ' . . o cant
.. mal mod ... , ,,, ...umtc I l<f Tvlor 2000 ). allons in
1
1..
tJ ,to l (f\ rm ... trvn!! .u ' ., . 11 0\t
r.H.' lc.lh t)f producr,on
1 1
t .... lp' lr' tll\ fhctor mh ttntagc-... for ttht<tnce qual it\ rl,
H h h '\ hL' ( C Of c ' ' " ' \ '
indu,tTJe' u1 \\ hJC t
1
rnHiond track n1utual1) nntJons holdi
h.. l,lbOUJ. ntt , , ... , , , . . ng
nnrt.'n.Jh or L t:ap r, tor tndo\\ dckt nuncd tnt<.:t nat tonal tr
1
' Indt''t'llOll'- ,.c ace
umlar Jd' ant,lgc:. ;;-
ilnd
1 1
, rt'ntrtl to "CCH!raphicar cconotnics cn1pha'
1
"es ho
t the m.'\\ tnu t' t ll.'Of! ' t-- ... . , w
Jn ctmtra _ ,
1
. ld concentration can mfluence and, 1 n turn, be shaped
. . du rnal ... pt:"' m 1. dtton ..u , . , ..
rrgronaltn
1
,
1996
) Jn th, ot 101pcrtcct cotnpetttJon. increased
b . d, ( and un t:\ '
Y ua t . . , .
1
'd t'rom incrl'.l : nt: to scale rather than the e\ploitation
,,clTlft...,,ltton tc 1990 E I
t ' . J tor en dO\\ mcnt l k.nJgman ). \.tema c ri vino
o( J11]crenuaJ nntwna dt .
' h"' r h dlian xtenlalltte .... of labour market pooltng.
incrt.'a-..Jng return r c 1 .t . .., . ... . . .
.
1
b
1
, . nd terhnoio!.!Jcal knowJedgl.: spdlo\ arc likely to be reahsed
uppllcr a' aJ a 1 H) a ... . . .
J l d C
)
1
onal -..cale r.tther than the nat1onal and tntemational le\ els. Indeed
ar the oc t1 an r b . . . .
b
- rrom the aeneral mfra. tructure and common external 1t1es a
1
se
ur am ...atJon e'- "' :::: .
from tndustrie locating in urban These growth spt11overs underpin the
localr ation of tndustry and shape the relative competitiveness of the constituent finns
within regional agglomeratiOns (Kn1gn1an 1993 ). Pecuniary economies that materially
affect prices m market C\change are produced by the agglomeration of firms from
different mdustrie). Geographical concentration makes a difference to the econom
1
cs
of firm and economies underpin the growth of urban locations, with
lar1!c and dt\'crsificd market supporting output gro\vth (Krugman I 991 ). As \1artin ...
and Sunle) t 1998: 207) argue. tht: cJustering of regions with &imilar growth
rate ugge. t the spi llo\ er of labour. capital, technology and other influences
on growth are geographically localised rather than perfectly mobile as suggested by
neo-cla') ical gr0\\1h theory.
Lchoing the institutionalist and socio-economic approaches, trade speciali sation is
seen hi tory dependent. Established patterns of spccialisati on get ' locked-in' by the
cumulati'e gains from trade. These effects impart strong path dependence upon local
and regional dcyeJopmcnt trajectories (Krugrnan 1990). Patterns of uneven local and
r.cgionaJ development. once established, can exhibit strong degrees of persistence over
ttme that .may support or inhibit growth. Local and regional development is likely to be
charactcnsed b) geoora 1 . 1 .
. o P lt(;a unevenness (Krugman 1995 ). The d1vergence of output
and 1ncomc between cent d h . .
. res an penp cnes and multiple possible equi librium posttwns
are likely rather than th 1 I
. c ong-run convergence proposed by orthodox neo-classtca
economrcs (Krugman 199 J ).
Strategic trade policy d
1
an ocal and regional development
trade theory em ph .. , 1 d
. ':> ; ' , as.tst:s low the geography of trade is shaped by states, tra e
tt=gttnes and mcreasmg tntr -. d . -
(K . a
111
us try trade between si1ni larl y endovved countncs
I ugmnn 1 9R6: Drache and c . 1 . I
, . , ,. . . H.! li er 1991 Noponcn eta/. 1993 ). It provides a thcorcttca
argument tor strategic trade )OI i . , C . .
I C) omparat1ve advantage may be shaped by supportmg
CONCEPTS OF LOCA
L AND RE
GIONAL DEVELOPMENT
.. tli:sed export SC<.;tors and, given their nccc:s . .
. sary lo(.:ahsation 1
I
. . . external scale cconon11es and technol og .,
1
. ocaltttcs and regions
" ' lCil. ll:<t sptllovcrs m .
1r1ol ist ic r\!nts (Marttn and Sun ley 19lJ6} Str t . . ay provtde sources of
nHHll . . . a cgtc htgh vatu .
l loctlitics and regtons m whtch they are concent ., d cor sunnse sectors and
llc.; ' . . ' ate can be idcnt' fi d
. given thetr potcntaal to raise national . d .
1
e . targeted and
pt tlH <ln rcgtonal in .
S Pr
ort 1nay include trade protection often through n , . (Rc1ch 1991 ).
u . . . on-tan ff bamers su h , .
. , d' lrds export and tax tncenti vcs for R&D c as tcchntcal
stdn ' ' . tnvcstment.
For local and regtonal development poli cy the strat . h .
. . f' . . , . cgtc c otces made about wh. h
ographtcal concentrations o regtonal tndustnal special . tc
gc . . . tsatton to support are critical
I
deed. such clusters not only provtdc emptncal evidence f .
n . . . o external cconom
1
cs but
lso help to define whtch 1ndustncs should be supponed (M rf
a . . . a m and Sun ley 1996 ).
Some tndustncs and places have the potentt a1 for greater growth d ..
an productlvtty
1.11crcases. Conversely, other lo\\er-value and sunset sectors and places m .
1 . ay rccetve ess
or no priority. trade theory pohcy debates focus upon the relative merits of special-
isation or divcrsJficatton (Geroskt 1989). Specialisation may provide the externalities
and potential for productivity and output growth but risks regional instability and struc-
tural changes through over-concentration in a narrow range of industrial sectors.
Diversification may not provide the dynamic externalities and boost to export growth
and productivity but n1ay insulate the local and regional economy from adverse demand
shocks and st1uctural crisis by widening the sectoral mix of its industrial base.
The critique of geographical economics
Alongside its emergent contributions to explaining local and regional development.
critiques of geographical econotnics focus upon the ways in which its parti cular
tends to neglect real people and places in thetr real historicaL social and
(R. Martin t 999). An inadequate sense of geographical and historical context _ts provtded.
The approach tends to reduce the region to a receptacle rather than a motor.
0
:
. t. ,t (Scott 2004) Despite its stated Importance, the histoncal
economic ac 1\ 1 y . . d S
1
l996) The
of the mode 1 remains unclear and clouded in ambigUity (Martm an un .ey
. . . . d [! 1 mathematical modelhng produces a
emphasis upon stmplt fytng assumpttons an orma d .
1
. . . f h t mal ities central to local an regwna
partial analysis of the potential d1versity
0
t e ex e . f
1
1 mstitutional,
. .c. .1 -. der the mfl uence o oca .
gro\vth. Geographical economtcs
1
at
5
to consl . .
1 1
d reaional de' e1op-
. f: T cons tram mg oca an e
soctal and cultural structures tn act ttatmg or
1
f local and regional
. . d l aming and the ro e o "'
ment, for exan1ple the tnnovatton an e
1996
. Scott 2004 ).
. . . d. d b e (Marttn and Sunlc) .
mstnut1onal agency tscussc a O\
Competitive advantage and clusters
. fluential nt:\\ economics of
B . . . 1 p t . has developed an tn . I I t
ustness economtst M1chae or et . f the geooraphtca c us t:
. . I nd dynamtcs o l t' itY
competitive advantage to expla1n the
10
e a . .
1
contribution to prol ttl; t\
. and thetr potentta . . d r-,tood
of mdustries \Vi thin national economtes
998
) 'Oe,elopmcnt un c.; . , .
. . (Porter 1990, I , 1 e
growth and trading con1pet1t1veness
1
t r. and natton.l
of firms c U!) c.; =>
as the enhanced competitive advantage '

0 F U '\!DE R STAND IN G ---------

FRAMEWORKS
,ith oeographical economic-.. and dt-..tinct fr<)
k 't fn common '' .... . ll1
tt n intcmatwnal mar t.: f Rtc:lrdian comparatt\ c ,l(h ant,tgc up
WI u .. . I conceptiOn" o ' . . . . on
t ..,<litional , .
1
JQO--l) Porter'" tnttlal mtcrocconomt c dnalv ..
ru t eta . - ' .
initial tactor endO'' . , , could be actn cJ) created through the "tratcg,c
.. tit I\ c ad' antagt: . > "
artlued that compt: . . , . tt, actt\ or , aJuc (I ortcr I9g5). 1
:;, l oradllll.! of cor por, t.: s
management anc ._ tt t romt1ctiti\ t: cannot solely depend
0 - I d --d hO\\ C\ cr. Ml t , . ll
initial work cone u c .b t ,, hen man) firms tn a gl\ en field arc
. I d company attn u
mana gena an .
1
., t.
1
. (Porter 2000: 254 ). Such geographical conccntra-
d . ust a fc,, oca 101 s
c0nccntratc Jn-' c 't d .
1
containing a nation's most con1pctitivc industries
. , or clusters were mtcrplt.: c ... . .
tron.s h ... r. rc became central to thcol):
Clusters t t:rt.:IO
h
.. , of interconnected companies, specialised
c1usters arc geograp tc c c . . . . .
Jdcr t1m1" rn rdatcd mdustnes, and associated mstJ-
supphers and en 1ce pro\ . . .
. . . r tandards a!!encics. and trade assoc1attons) m parti c-
tutwns (e.g. unn ers1 " --
ular field that compete but al o cooperate.
(Porter 2000: 253)
lr and complemcntaritie between duster institutions are interpreted
The cornmona 1 1es . .
as pro' iding localised and pilJovers that could n1ake posJt1 ve
10 the competiti\'e advantage and trading performance of duster part1c1pants. The
competitive advantage of leading fim1s and industries could be reinforced and
ficd by their geographical concentration. For Porter, the effect of location upon compe-
tition has four interrelated analytical elements. captured metaphorically in the notion of
the 'diamond' depicted in Figure 3.13.
The main benefits of for competitiveness comprise, first. boosts to static
productivity growth through access to specialised inputs and labour. information and
knowledge. institutions and public goods as well as localised con1plcmentarities and
incenth es to performance enhancement. Second, clusters can foster innovatton through
clear and rapid perception of buyer needs as well as promoting early and consistent
learning about evoh ing industf) trends, technologies and other knowledge vital to
ongoing competitiveness. Third. clusters can promote new business formation and inno-
vative inter-organisational forms through inducements and relatively lower barTiers
to entry as well as ne\\ experiments in collaboration and partncring. Increasing returns
and the spillo\ er effects of externalities characteristic of the new endogenous growth
theories abo\e are integral to the dynamism and gro'A th potential of
Successful can forge 'first mover' advantages and benefit from e'<ternalittes
and increasing returns to establish their competiti\e advantage at the expense of other
JocaJit ies and rl!gions.
Extending from the firm lcYeL Porter's research initially focused upon the national
level and then, in search of a fuller explanation, on the local and regional levels (Port er
1 990
l Some work even explored the con1pctitn e advantage of the 'inner city' (Porter
1995
J. Clusters can range from a city or state to a country or even a group of ncigh-
countries in their geographical scope (Enright 1993). Echoing clements of insti-
tUII OJHI I Jsm and socio-,...co 1 . tl d g an
"'
1
omrc 11eoncs. clusters arc seen as capable of provt 10
CONCEPTS OF LOCAL AND
-
- : 11:1.
Factor
conditions
Firm
strategy,
structure
and rivalry
Related
and
supporting
industries
Government
Demand
conditions
Figure 3.13 Porter's diamond model for the competitive advantage of nations
Source: Adapted from Porter (1990: 258)
. . f , d. t' n in the continuum bct\\ecn
intennediate organtsattonal form and means o coor ma JO
markets and hierarchies:
. . within a structure result
Repeated interactions and Informal conttacts . . d t ter trust,
. . . b .. d eograph tc at ea an
from liYing and \vorkmg tn a ctrcumscn e g . b o market
f scvenng and rccom tnm:;,
open cotnmunication, and lower the o
relationships. (Porter 2000: 264)
of tht
. I lineaac common to s
Indeed. Porter's work form part of an tntellectua . , e , >hV and regional
. , . I . "'<.:onomtc gcogrclJ . , ... .
approaches to industria] agglorneratJon "tt
110
t: \i rshallian and tton
. . theory usmg '
1
. 1 tnd
dtscussed above includtng agglon1et at ton . . . t innovattvr 1111 Jell:\ '
' . d industnal dtsttl\..:
costs approaches, transition theones an . d Sunlc' 2003 ).
. ?OOO l\tartul an
socto-econon1ics (Gordon and iV1cCann ....
, "') t l\r 'h

. al development policy
I and regton
ClusterS and roca ) f()l llll' clJ and lt'gllllldJ dL'\ dopm ' Ill pn)j
1
\\ tlh ,tlllll' ) .
,. ll'' .. t.l"l.''l UJ t I, tJllJ n u a.lll\ t' ,ll\ldtJntl' k .tnd Ill
l llb( t' . '- . l , . , ,,,1 "'' ' I ' \
. . r ) r t t'l " "' \
1
,)
. f 1nd t'' 1.. J . tbl. lt\ld nllt' ,lttt:ntton t , u tIll c1 nd Sun I .
. l. pnu , . 'I\ l'd l'\)ll,H.l . ( ' y
. . , , c:u:\tt'T 1 ,)hn Ill . f "'()ll()) J)l,lt' U 't' h,\" "nlll
' ( liilh)ll (- - \,
l")' Llg"ndJ" .tnll I.
- . . . J{ r\l I ' '-
1
tl} tbt. ' ... . > Hltt'lllltton.tlh t ' l1tnp 'lltt\ tL'gton,tl nationtl
:- ..,f ll , . '
'w .. ra:- .1 mc.Uh "
1
1) poltcy lhts Pl\)\ ed attr,lct
1
ve
1
.
u . . ( B 'r'tnan a . - 's
., ,r ('f wmn lHwn :- b . . >r r.., )ducth it' gro\\ rh and lrlth)\ ation. It
' 'th.'lll ..... l ,, . ._ " .
. . I )ur c ot " . . 1 . t .
1 Pl'rcnh.l ...;(
1
. J Ulll ('liJOtMi tn en cntton to
lc wd n_)k to{ o a ' . :::- .
L)J\)' .l rauon.t . .
1
. l . .
111
d de\ cloptncnt polt c\ find
. , f ..., , op.11 '.H. c.l\. . , ... "
, . r ' ttron ana " t t . t b .. o . 1 s . .
l t. . . . . , , p Hential ) c'tcnst n. l1 upponmg nati onal
. . , n d .. , '-' ... lt " .. . .
J l.' '"'-H i p ) )i v acti' H\ has rocu cd upon tdenttf) tng and
' '' I ('tlt'\ u l '-"
1lnbt. ' u J '"' o intt'rv ntio:b :o (':lcouragc thctr growth and contnbution
1 ell' lC' . :lll
nupplll,:. . , . . . . -,ducti' itv and on1rct,ti\ ene' s. E\.amplc 3.3 orne
t' .. ''onaa .ln 1 nnoona.: P l . . I d . I d
" ''".:' . h .1 ,,. poli ., "1 .... L'een tor loca an regtona C\ eloptnem.
ot' i'1L :n l.U lt:.
The critique of competitive advantage and clusters
I
d flu 'n ... of Porter clu ters theory haYe prompted substantial rcflec-
The ropu anty an m t: lt: . .
d t
., - n Ftr t the clant\ of clusters has been challenged and, m
tton c1n en r .
1
"' J
.. . 1r lt.nk'lte to dn'cr ... Jt v l f e'\tsttng theoretical approaches to geographical u.: .
rarion (Gordon and l\1cCann wlartin and Sunley (2003) the
tcr d a chaotic concept. _ Porter' upon finn and industry-oriented
nN1on or' comnetition and been questioned in relation to local and
regional de' elooment. It i nor clear whether and hO\\ competitivene s can be terri to-
... .
ria) Jnd defined in term of reg1ons or nations (O.Donnell 1997). To what
e\h?nt can place .. concci\ e of them eh e betng in competition \Vith each other? l\1ore
anah tical re\ ie'' has to identifv the interrelated factors that dri ve local
- .... -
and regional competiti\ (Gardiner eta/. 2004) (Figure 3. 14 ). Indeed, given its focus
upon the e:\isring workforce, hjgher le\ el of competitiveness can be compatible \Vith
job lo and greater economic inequality and contrary to local and regional de' elopment
1 Sunley 2000). Although. ib proponents argue. enhanced competiti\ encss and produc-
tJvity may economic growth. and income.
Third. the scale and le\ el at which clusters fom1. operate and extend have not been
The key geographical concepb of space. scale. place and territory intro-
duced Jn Chaprer 2 remain underde\ eloped. in Porter'. of the theory.
Fourth. theol} gi' e limited attention to the social dimensions of cluster fomla-
tion and dynan1ics and Sunlcy 2003). Last, the Porter brand of clusters has
beconle tainted to a degree by commercial promotion and consultancy coupled with
fa:hionabJe policy transfer and faddish adoption by internationaL national. regional and
local institutions ( \ 1arti n and Sunley 2003 ). Critical eYaluation of the
lnlpacts of cluster policy upon local and regional developn1ent has been litnited.
models, such as clusters. rna) only work when adapted to particular local and
reg1ona1 contexts (Hudson et a/. 1997).
CONC E p I S or l 0CAL AND
REGIONAL DEVELOPMENT
Cluster policy for local
;
..,pie 3.3
Ex au
and regional development
J l
cu ion:ll lkvelop1ncnt pol icy has been attracte l t
1 .. I jJlH . u 0 c liSter p r .
I ,,L' . l ' tti onal rcpuJnal and local competiti veness
0
ley as a means of
ot uw.
1
' ' , growth and
pnllll .. .. works have uttll scd M tchacl Porter's ideas ' IS th. mnovatton. Many
I' .. \' If a IlK ' ' C standard .
lw H.:. \ . \\ C di scuss in Chapter 5, dcccntrali scd approat\
1
ns t
1
concept tn cluster
1 y : s " " o ocal md
f1ll It: . . . g i nd i strengths and endogenous growth h . .' rcgJonal policy
, 1hastslll . dVC rcmtorccd th' .
'
11
' C)li cy focuses upon the supply-s1de and alms t . IS trc:nd.
P . o provtde pubi' .1
l
1
tbscnt due to market fad ures. These public goods oft .
1
lC goous
former Y '
1
en me udc cooperative
k
. bet ween c I ustcr part1ctpants, co lectt vc marketing of special" d k'll
ndwor s . . . ... . . , , . tsc s I s and know-
lo
cal bust ness scrvtces (e.g. finance, legal , marketmg design) a d d' , .
. ' n tagnosts and
... . ... . to ren1cdy1ng cluster weaknesses. For local and regional devel . .
rt:sponst.:s . . . opment mst1tu-
l
. . laster po1
1
cy de\ e loptnent typtcally compnses several activities First th
uons. l: l . . . . . . . , e process
. . ,ith n1apptng and categotlstng clusters Wlthm local and regional econ .
bcgJOs \ . . omtes.
\f;pping identifies \vha_t the are and the1r geographies: Typologies to group similar
. together n1ay ltnk to the1r stage of development, for mstance embi)'Onic grow
1
ng
clusters . . . ,
or declining. Second. analysis IS of and/or national scale and signif-
. ot' tt1e clusters, for example asscsstng thear rclatt ve shares of exports, emplovment
.
r R&D investn1cnt. Here, cluster depth - the m1x and range of industries present in
cluster. dynamism and contribution to regional and national competiti veness - may be
.. d Th.ard the strengths, weak.nec;;ses and needs of clusters are examined to identif)'
asscssc .
h
riorities for cluster development policy b) local and regional development institutions.
tcp 1 ld 1 1
Despite the popul arity of cluster an and regwna eve ctrc.es. cnttcs
have noted the tension bet\veen \Vantlng to tnclude as many finns m
rather than being selecti\ e and prioritising and the need for targetmg for cost
public policy. i\ further probl em is that types of clusters often been Jdentt-
fied in different regions as each seeks to capture the growth potent1al of knowledge-based,
d .... t .. t es A UK-based commentator bemoaned that rather than
hagh-tech an or creattve ac n 1 1 k' t
. . ,.., . now appears to be see mg o
I seeking to identify distinctive reg1onal asseb every teg10n . .
1

1
. Tl .. ch to clusters 1s problematiC 1
develop the same clusters of ' ballet and btotcc 1 lJs approa . . . . d.
. build upon dtstmcttve, m tgcnous
since it undem1incs the central notton of the nee to
regional strengths. . d
8
Research (2003)
. . p (?003): 'I ren s U:>l
Source: Martin and Sunley (2003). orter -
Sustainable development
.
1
I nd reoional
1
. ftuencctn oca a .:
1 . b me the centra m . 11 JQ04
Sustainable development has arguab) eco . ?QQ? Haughton and Coun.e - '
d
A I 2000 GtbbL - _, 1 n
1
11 ha' c
evelopmcnt in recent years ( ngc
1
d regional deve opt
1 c: ms of toea an l )P'an
; .
Morgan 2004 Roberts 2004 ). Tradittona tOt n gro\\ t 1 l \ ::-
' d too focused upo d . of
been challenged as overly economi sttc an . no impact an a ' .
. . . . . 1d the mcreast . . u:-.e fonn
2004 ). Amid enduring socaal mequa!Jttes aJ . .
0
of rc ource ..
bl ms of cxrtm.::
the ecological and enYironmental pro c
FR
- -
-
1\
- ...
-
(
-
v
1\
- -
5asesd
Ca ?=" :e'l2SS
--
Figure 3.14 The model of focal and regional competitiYeness
A- 1.-.....::::-
1')ce... e: a 2004: l:.u.-:::>- uut
of local and regional de\ ha\ e been st. thai might pr< . e more
-in SO!Il{" seu3:e longer enn. more durable and .... r :ess damaging- in economic. social
and en,ironmenml el1115.
disc...::ed in Chapter.::. ne\\ metrics for local and regional de\elopmem ha\e
h'="Pn sougbi rna fi- ... a notion of de' elopmenf encompassing health. ,, eU-
and .. uj 1e in and regioru 1organ 200- ). For example. local
and regional qual icy of life an \ af1 e\en \\hen places appear to have
imirar le\eB of GOP per and income:
the --;. ro: of ezzogiorno [the south of I tal) J are as poor as \Vales in
te'i& ui but do not from such debilitatin2 rates of lonq-
tenn limiiing .. panl} c.ause the'' e access to a much healthier di;t.
-
Poo- healh is both a cause and a conse{}uence of a \\'eak labour market in
\\ a.Jp- h' b .. I. . ]
. -: -- 1g Oj .!IIDittng ong-leinl illness are pan of the explana-
n n to- high le\eb of inacti\ in.
.
(.1organ 2004: 88.1)
on from the 'nifaJI. en\ ironm nt-dominated and somet!me: anti-orO\\rth con-
cern rn dt 19-o deba" &: r:
- e no;\ OCu_es upon the fundamental que-tionine of econom1c
growth a an end in or as - . .
S
'>OOO an 1ne' naole mean_, 1.0 achie\ e hiQher standard: of h\1Dg
uney_ .
Recent uo u ta. bl I
. . - ina e ocal and regional de'.'elopment seek to integtate
lronml:nud and ociaJ oulcomes to2ether rather than compromise
an.d batan (H --
on . aoghton and Counsell ). DiS1inctions are drawn
- t.b... 'ropnare pnonr_ gi en to intrin'-"icaUv thjnQS - such as health.
. -
COr CEPTS OF LOC
-.,_.::, A 0 PEG I 0
. AL DEVELOP l E -
llbcing and educatton - and tn trumentall . .
01
( torgan 2004 ). Definitions of su tai:abltgn,ficant things _ uch . \.._
tn o . . . e de, elo as and
td comnu:,::,ton on Envtronment and De\el . Prnent often build
\\ or opmem n
98
-.
8
. upon the
nt that meet the needs of the present ,, ith
1
... 3) \ersion of "d
0pn1 h . out comprom . e\el-
rations to meet t etr own needs'. In cone tsmg the abilh" of c.
ocnc eptual and th . ; Uture
tainable development ren1ains difficult. :>tipperv d . eorettca\ tenns hov.e
"' 1.., ' I . an elust\e (\\ .,1. ' \er.
- 004) A- Table -'. .... 1 a ladder of su-ta bl l1 tam.., and Millingto
- . . ma e de\ ct n
..d to idcnttfy the dtfferent elements of the spe .fi opment has been deve\.
l)rl,; Cl c approaches t .
ment. rangmg from the quo of the rreadm'l\' h
0
su.stamable de,el-
op . {Ch J t '' eak d
the Ideal tv1odel attenon 2002: \Villiams and an strong versions
ro 1 mgton ).
weak' and strong' sustainable local and regional
development
\\'eaker foro1S or development - often derided .
p h . as sha1low en' tronmen-
'
'.1U
- mterrr .... t nature 1n uman or anthropocentnc tenns a .
. s a and economic
oro,vth a .... . Expandtng the stock of resources tbrouoh t h
1
. .
= . . . . . .:: ec no ogtcal solut\Ons
\\ ithout chaHenglng extsttng capttahst structures is central Pnn
1
.
. c1p es compnse the
u e of rene,vable energy. substitutes for non-rene\\ables and more ffi
. . , . . . . e ctent resource
ut1h-atton. Eco1ogtcat has gamed ground as a means of promotmg
more enlightened and sensltl\e approaches to sustainable economic {!towth and de\el-
-
opment. En' ironrnenta1 justice is a weaker Corm of sustainable de'felopmem that
funher economic growth but with a more equitable redistribution of co;)b and benefits.
in panicular. the approach -eeks intra- and intergenerational equit) (Hudson and
199i).
StronQ:er fo1 tns of sustainable de\ elopment connect with notions of and polit-
-
ical ecolo!!Y that prevailing capitalist social organisation (Haney 1996). In
-
this approach. the peopie-nature relationship is re\ ersed and interpreted as human adap-
tation to finite nature (\Vill!ams and Jv1illington 2004). Indeed. biocentric egalitariani m
seeks to en dO\\' nature 'vith biotic rights to pre\ ent its exploitation .. otions of v.ealth
are understood in a non-materia] '.vay as wel1-being and hannonious co-habitation within
the biosphere. Stronger sustainable de\elopment seeks to the demand and
of re ...ources.
Sustainable local and regional development policy
. , I oical rnodemisation. has
or the \\eak development approaches. e.co
0
= f
. 1' Examp]P"' include the promo.lon o
mfluenced local and reQional de\ elopment P
0
tC}
1
d mark,tS and
- ,(', tural resourcPs. ate
more efficient economic grO\\rth that uses
1
e"er na . RobertS :!00-1t.
. dn\ er (Gibbs - -
USing environmental an economlc l
1
ers (e
0
air-polluuon c,Qntr I)
Concrete policy initiatives indude en\ ironmenta c US\ o fiO\\!) from 1
and industrial that connects and utilises \\aste_ resourcel
1
.u e approach
. . En' .., .
prox1mate industries to vield v, ealth from waste . . Vno po iti c di mbu
ba
' ent pohc JD ;,e. t l
ve influenced local and re2ional de' e
1
opm . ent and the
1
=
tional outcomes. includin2 the--remediation of degraded en\ Jronm .
.....

116.:

OF uNDERSTANDING
FRAME\\ 0 R < S
- I able regeneration
. susta n -----
12
Principles II
Table 3. . - . ttreak Strong ' Ideal mode/' -
Approach to
sustainable
Treadmill sustainable sustamable of sustamabJe
development development development
- Anthropocentric
Philosoph}
Exponentral
Role of econom)
and nature of growth
growth
Geographical
focus
Nature
Policres and
sectoral
integration
Technology
Institutions
Policy
InStruments
and tools
Redistribution
Civil society
Global markets
and global
econom}'
Resource
explortation
No change
Cap1tal-intensrve.
progress1ve
auto matron
No change
Conventional
accounting
Equity not an
ISSue
Very limrted
dialogue between
state and
environmental
movements
Sourcu: Adapled from Baker ct a/. (1997)
Market reliant
env1ronmental
polrcy. changes
1n patterns of
consumptron
Initial moves to
.
local economrc
se lf-sufficrency.
ninor rnrtratives
to allevrate global
market power
Replacrng finite
resources with
caprtal;
exploitatiOn of
renewable
resources
Sector-driven
approach
End-of-prpe
technrcal
solutions, mixed
labour- and
caprtal-intens1ve
technology
Minimal
amendments
Token use of
envrronmental
indrcators. limited
range of market-
led policy tools
Equity a marginal
ISSUe
Top-down
initiatives.
ltmited state-
environmental
movements
dialogue
Ecocentnc and biocentric -
Envrronmentally Right livelihoo
regulated market. meetrng
changes m not wants
patterns of changes
and patterns dnd
consumptron levels of
Heightened local
.
economrc
self-sufficiency
in the context
of global markets
Environmental
management
and protection
Environmental
policy integration
across sectors
Clean technology,
product life cycle
management.
mixed labour- and
cap ital-i ntens rve
technology
Some
restructuring
Advanced use of
sustainability
indicators. wide
range of policy
tools
Strengthened
Open-ended
dialogue and
envisioning
consumption
Broregronalism
extensrve local
se If-sufficiency
Promotmg and
protectmg
biodiversity
Holistic
i nte rsectora I
integration
'
Labour-intensive
appropriate
technology
Decentralisation
of pol itical. legal.
social and
.
econom1c
instrtutions
Full range of
policy tools,
sophistrcated
use of indicators
extending to
social
dimensions
Inter- and intra-
generational
equity
Bottom-up
community
structures and
control, new
approach to
valuing work
-
_____ CONCEPTS OF LOCAL AND
REGI ONAL
. --= DEVELOPMENT
t nti al of dcmanufactunng'. Sustainable appr ,
1
,
pll . . . . oac lcs to rcgcner .
.
1
inllucnccd dt-:,cusston tn local and rcgton
1
d , , at1on have mcrlap d
,IIH _, a C\ c\opmcnt a pe
l
,
1
,, top-down anu grass-roots' <)t . round the contrasts
Jl_; l d l' . rong sustatnlbl d "
. mot cd sma 11-sca cccntra tscd and t ' e cvelopmcnt ha
pr o " , .. , , . . orms of social , ,
sclf- telt ancc and mutual a1d (C hattcrton
20
()., ) orgamsatiOn that
pH . . .... Local and ,
nt exampl es mclude local tradmg networks and c.
1
. regtonal devel op-
me co og1cal taxes
usc and pollution (I I ines 2000). ' on energy. resource
The critique of sustainable local and regional development
Sustainable approaches to local and regional de, dopm'"' nt h , b .
. , . c a\ c ccn to cr t'
cism. For weaker sustamable development. criticism focuses
1
. lt-
. . . , . upon t le refomltsm and
limi ted contnbutt on of such tdeas to sustamabthty and the .. b.
1
.
. . . . . l of actual\v
achic\ mo economtc. envtronmental and soctallv mtegrated app h
1

c e " '"' roac cs to oca\ and
regional de\ elopment (Haney Haughton and 200
4
) Stro .
. ngcr sustam-
ability in local and reg10nal development has attracted cntic1sm for its potentiallv unre-
ali stic search for ideological purity, practical lack of feasibility and ltmtted. (}mall-scale
examples. Gi ven the changes requtred to put local and regional develop-
ment onto a more sustatnable footmg, the relatively initiatives introduced to
date often seen1 litnited relative to the scale of the problem. In tennf> of govemmcnt and
governance, local and regional institutions may lack the power and resources ,, ithin a
multi Jc,cl polity to deli ver sustainable de\ elopmcnt ( \1organ 2004). \otwithstanding
such issues, sustainable development is a key concem for local and regional develop-
ment explored throughout the book.
Post-developmental ism
As we saw in Chapter 2, the notion of 'development' has been questioned in the ltght
of post-structuralist debates in social theory (Peet 2002). is .theo-.
retical approach to knowledge and society that embraces the of
. . . f d' . d th pol'tttcal cffecttvrtt of tht!Ol)' and
mcamng, the constttut1 ve power o tscourse. an e ; . .
. h t e of modermsm and tts
research' (Gi bson-Graham 2000: 95 ). At tts ear1 1s a crt tqu . .
. . 1 t modemist thmkmg sees
epistemology or theory of knowledge. J< or post-structura 1s s,
. .
1
p _ t ralism interprets kno" ledge
knowl edge as stngular, cumul att\ c and neutra . ost struc u , .
. . ts understood as a t1C
as mult1ple. contradi ctory and powerful. De\ elopmcnt , . .
1
,r-
. . bl ... I nd rornoted b) m
dtscoursc . a sociall y constructed nan atl\ c assem C( a P . c l ..
1

. . articular wav. l-or Jl

csts - that organises knowlcdae of economtc change
111
a P .. , ..
11
socrtl
z::, f wth along a '
Graham (2000: I 03 ). 'development" is 'the story
0
gro ck d ' <;'' arc ;:,CCll to
. . . . I , . t-. . cd b)' "bac \\ ar nc::,.
trajectory m which rerr10ns or natwns c 1at ac t:ns . . r
o . . d h f ll real izati on ot thcJr potentia .
progress towards modem tty. n1atunty. an t e u . d
1
of chan\!c in
. . . tl , modcm1st mo c ... .
The post-structurali st cntt que focuses upon
1
c .. . , .,
1
) It crit icises tts b ll"ll-
. Ch t . ? (sec hgutt: - . . I
war developmentali stn di scussed tn ap ct ... . , . fc,cloprncnt' tm:d rttH
. , . I ' , bcst-W<l\ rouk to c . 1 . d
centnsm and representatt on as t 1c one-
1
t thCl)rists tnt u<.: nu.:
. . . .. . . h Post-cle\ c opnH.:n
tested by the mdustnaltscd and developed :\or t
--
118 .
, _I
Post-development in localities and regions
. .
1
. d d , d opm nt' l ,:..., ,. unulatcd think.tng about post-
Th . nttqu , o mo r ... ... . .

1
d ha' in . ne mfluence upon que .... ttons ot locaJ and regional
l , I< pmenta a. m ar =- :: .
l t (Ed
..
1
rd 19 9 Rahn ma and Ba" t:cc 1997: ( Jtb"on-(,raham 2000). Post-
d ., opmt'n . '' ' :.- L' "
" . a1\ .
1
01 rpret ' anomie rationalttte" as and takes
: tum ... . Y"
dn ,. , .. l,rical fonns. ha' di:stin t geograph1c-. and produce fk regional
of (Pcd 199 : _). CentraJ to approach arc the
: of genealogy and dtscoursc analysis to the historical
,_
c'- of,, i1at appear to b narrati\ e of 'dc\'cloptncnt' . Qw:stioning
pre' a1iing ,, : d,1m - articulated in often competing of n1odcrn1ty based in
ditfcrcr.: , 'dal and politicaJ imagination - then provide() the abili ty to such
de,elop alrernati\e The objcct5 of 'development' might
then be :oned out"ide a discourse that produces ience, victin1hood. and
economic nupotence (Gibson-Graham and Ruccio 200 I: also G1bson-Graham
2000: 104).
Post-development in local and regional policy
m . a theory of development deter rn1ncd by those to be
or. crucially. those who choose not to be in a part icular way.
Empowered. gra -roots leadership and nationally. regionally and local ly appropriate
fonn: of development are the a:spiration of this approach. As discussed in Chapter 2.
than have a model of "dt:\ clopment' sociall y constructed and imposed by other
post-devclopmcnta1ism encourages localities and regions to seck their own
answer to the of what kind of local and regional development and for whom.
local and regional dc,t:lopmcnt policy. post-de\e) opment ideas have gained ground
199
0s. Example 3.4 de cribcs Gibson-Graham's approach to capitalism, non-
and communi ty economics. Attention has focused upon the potent ial
economic and social dc\clopmcnt of attemative' and more 4 di vcrsc economics
connected to the social needs and aspirations of localities and regions, including
lnJtJatrve!j such as Local E l T . . . d t .
1
'\ediatc
. ..xc lange radmg Schemes, social entcrpnsc an tn en
markets for labour. goods and services (Lcyshon et al. 2003 ).
C.ONCt P 1 or: l OC
il\l AND
REGIONAL
DEVELOPMENT
mp
le 3.4
ex a
Capitalism,
economies
non-capitali sm and
community
. Crah:1111 's (2000) ' post-structurali st' api)I'Oadl t
1 ( lhSt'n . . o ocaJ and r , ,
J t chalkngc the; ways tn Whi ch the capitali st" . cgtonal
l' k:\
0
.
1
' non-capnalism 1 .
.
1
. l ,111 l:cono ntt C d1 scourse that constitutes capital , . re atJonshrp has
pfll\ .llll ISm dS a l1CCCSSr\'"'-' d .
f
cconon1y. r hey argue that non-capitalist fon . . '., an dommant
f,mn o . .. ns are typlcall y w d . .
. ' tJJitalism only as cqut valcnt. opposite complemc
111

1
crstood rela-
tl ' t.' to . ' ary or subsume 1 1 .
.. pit'llism is oft en seen as subservtcnt, weaker and less d . c n Pttntcular.
\ . repro uctble. . _
mic practices may Jncludc the household, the informal ccono l . on capitalist
cconn . . . . . my. a ternattve economic

1
ments or coopcratt ves. Such acttvlttes may constitute a sub .
1 . . . . . s antta patt of the 'ceo-
\
, but an: currentl y ttcatcd as tnvJsJblc - the htdden part oftt
1
e b , (F.
nom. e erg tgure 3.15 ).
Wage labor
produce for a market
in a capitalist firm
in schools on the street
in neighborhoods
within families unpaid
in church/ t emple
the retired
between friends
-
volunteer
barter
moonrigfitintJ
children
illeeal
injorn1ar (endina
not r nonefized
not for market
self-provisioning
producer cooperatives
consumer cooperatives
non-capitalist firms
. nd non-capitalism
Figure 3.15 The 'economic' In capitalism a
S 't economJes.org/J
ource: Community Economies (http:; ; www. cornmunr Y
I fR..:: \\"lNG
FRA RhS Ul" ,
....t1U:l'e: G (2000)
' "''1' 1 . " .... ) ,, .. ... ,.,
;.. I .. . , ' " .... ...
The critique of post-devefopmentalism
P rh .. ;' .. .. gi' en their radi 'al intent anti e.l!'"l: _tag of e\ olution. po.J-
.:tru 'tur .. .:< JP. rol I and regional ctopn1ent la\ Jttracted
Criti ... .. . c-... n1pl.. ... -..; . : relatn Lnl. It deliberateh
Ia"' :.1u eo .. '" . -- \ tan. and foundational or uni ve- .. princi-
: .. . : l'J OJ. han an) notion of ... and oro e: e ..
iu .... : ,..,J .. ,. ' ' .. ,vl In p ,, d . .
,.- ... , ,," ... ... '" . ..._ .m .o' 'r ume. JUtdtng 1dea' ...n ,a;uc 0f p
'
1
... are Hle prouLCt' \ r partkular : . place and tune::-. \\ e retunl to 1 "'L
of re!ati' i r.: in the conci\_; ' :vn m Chapter For con (-004).
'-' .. J '- lUrdtl '< .::mal , i ' d, "' 1 ,
1
. . .
t "J .. ..1 nat\e re at1vcn1. and polit-
Jcat 'oJunt .. :-; . :!1 that . adeq t I . , ,
e
1 1
. ua e to re og;1: Lhe often pO\\ er of
xrema .lnd underlvm , ,. n , , . . . -
( 199
) r. ; _ . ru tr'- locat anu regtona: elopment. Peet
On\ -- counter- n t q . . . . . .
tion of d.,
1
.
1
u or r ' ' -' t'" LI s nc=atne atutude and re_1e -
... ' opmem. mode nut' . . ..
'dp
1
. ana e ononn ana 1nterpre:, e cnuque of
'"'e opm nt a.:: an ana k upo t -
, ntion for th . n t and progre l \ e idea of n uonal -ocial inter-
e 1moro' m m of h , .
n d fora d uinan e and In his 'ie'' the
mo t theon and p . ; . '"' . .
lib raJ ordpr . .
1
rn
1
t d ' dopmcnt al ten1atives to the current ne -
" nuca In additio _ .
erarel} fail to kn . ,. . t - . tural L t ott en tgnore or dehb-
- a 0\\ I dot: It .._ 1 .
Economi De,el Q ;:: .
11
tu t 1 IUt' re n1odemi tradition of Cornn1un1t)
. . opnh .. nt anJ l r . '"or ,.l tn , . ,
dl ll d Cb
t! . (,; ut k ('Ontrol anJ cmpowen11ent "e
;) e tn apt r ( E
- "' _xamp] - .6).
CONCEPTS OF LOCAL
AND REGtQ
-- AL DEVELOP
"1 E T
conclusion
,
1
. lrtpter ha!> cd the tnain concept a d h .
1 .. n t
i intcrprd and cxphun local and regional d '"'l ' eek to help u t
. . . . . .... C\ \:: opmem N . o under-
)
11 tc" tn reg tonal growth and
1
. eo-c\a- 1ca1 theorie
ttl . . . . .... t lCtr lono- . 10Cu
, .. l)c-patt:: cnuquc b"hed upon reductton and co
g l1l l _ .. .. "' ng a mer-
1
'IK tht-. thcorv remam" itlfiue t' t " and contrarv emp1
1
l'' 1 n a a tOr "free-m . . J nca
t
rc\lional de' poltc\ In contr . K . arket ofloc 1
''"' ::: ... , . . , eynestan theorie- . a
and tht: tn wht(.;h unfctlcrcu d . , e reg1ona\
.... . . . . ,.,. T' ... ... . ten to rcmtorce h
.., l
11
onal dl',plrttll: !>. tl t.: extent of ....
1011
b t , rat er than reduce
rt = . c \\ een core ana
' \. pl ..
1
incd the thcor;. the subJect of deb t penpheral regions
t . . . , a e and an tmporta .
norc in ten fonn - ot local and regional de
1
. nt mfluence for
1 .. ... _ . .... 'e opment pohcv.
ot and temporal change mterp t
1 1
.
. - re oca and reotOnal d 1
U' and proce that nla\ inc _::: e\eopment
orporate of "*--
":' lcmic .. Stage. and -e
1 1
fi _tructurat or
. . . . empora rame\\ orks to l .
de\ eloptnent and ns parttcular '1 rica I e\ oluto . . exp am
- . . . .
1
n m :spectfic of 1
\t
3
r \.btll and rad1cal pohttcal econon1y t c he spatial divi - fl b . Pace
. . -Ion o a our to re\ eal th
hicrarclHcal relauon- bet\\ een and to explain reoional h . e
, , ::: gT0\\1 ept,odtc and
c.
1
pabk ot pcnods of con\ ergence and di\ C"' _t.: 1ce. Transition th . . .
. . . .... eone - tnstttut10nah t
t.ransJctton and regulattontst - mtei'J)re .. local and reoional d
1
.
,.. . . . ., . ::: e\ e opment m the
c
0
ntc't ot ' Ub e sh111s 1n the nature of capitali:m. Social. technological and
tutional characten ' tlC- arc central to e\plaining the resurgence of pecific t\ nc
3nd regional economies. De-pite cr1ttqt..e of their reliance upon
and their failure to e'\plain the di' at' lo at and regional de\ elopment experienc;s,
transition ha\ e timulated a 1ent fo us upon indigenou- a _et and
ctc' clopn1cru fron1 b elO\\ ' .
i -n1 and -ocio-eco:-tomtc" en1ph \. social and in:titutional ontext to
explain unc' dl local and regtonal development pecific and parti ular of
localities anJ region are central to explaining de' elopment trajectories O\ er rime. e pe-
cialh the ro k of inren11ediate bet\\ een and hierarchie:. Theorie.: of

inno\ ation. knO\\ ledge and lean11ng cck to op "n the 'black box of te hnological
progress integral to neo-cla sical of local and regional gro\\1h .. G agraph-
ic a I unc' cnncs in itulo\'ation. k.nO\\ and leamin!! is bv differentiated
ocial and institutional -rntcture and m;rked impli 'atkns 'vr and
regional de' elopn1ent. In re "pon e. local and regional de\ elopment .nfomled
these ideas has to to-ter the of institutions to build anon capa
and foster collect i, kno\\ application -c .. ialleammg.
Extended nco-da -ical \.1f local and regional cte\ elopment to_ addre.:s
the problenb of the con\ entional nc0- 'I ... ' :\. al approach. Endogenous theon m "Orp -
- 1 . wth sa' in!! rate'. human
rate fom1erlv exten1al or e,ogenow- i..l 'rors - popu anon gro . - ..,. ,:>
. . . - . . . dpl- xplain re!!tOnal on' rg .. n ..
capnal and technoloJCa1 progrc5s \Vtdun thetr mo ... - . D ... it
d d' - - . f' h. h d )O\\ orowth -P
an 1\ergence and the patial o tg an = . -
1
iP\Pl pm nt
c . . .. . r: f local and reQaona ..
endogenous theon ha - haf ed the
10 0
d reei to
1 - "' of all I "'a .In -
po cy towards leYellin2:-up the P rtomlan t: G hi al
enhance local. and national de\ elopm nt. elograpon
11
,
.... d tPma .... on ...
em h t m- an .. x .. ..
P a ses 1m perfect competirion. lfl(re .. r..:- u
FRAMEWORKS Of UNDERSTANDING
t
trade in it conceptual itnd theoretical fram
d nun-corpora c ' . c '' Ork
\\ith intrn-indu ti) an
1
ce of convcntronal til e
rn com crgen Ol) I
Rather than the . , nee io tcm1s of the dcveJoptnent of muhipJc ' t
' ,;and n.: !!JOlla I dn erg I . I' . cores
Joca ..., . d. lie)' c k to t lC speer a antcnlat
". 1teac tra e po . onall)
and pcnphcne. ..... h' .
1
, cone ntrated export . ector with local and reg
. . d ceograp rca ) . ona)
comp tltl\ e an - . C petith e ad\ antagc thcol) explam.. the role d)'n
om .... . . . arn1cs
de,elopmenr rn . potential of the geographtcal cJu tenng' of ind
triti\ cne cnhancmg . . . . . . ustnc
and . ,
11
"'
1
,, ithin nauonal econon11c . Clu tcr poiJcy 1"' high I)' fi
h lo ...al and t:\ e . . m u-
art c '" . ,
1
de' clopment m fostenng the benefit. of 'cJustcrin ,
1 local and regwna g to
enua d 'd'ng a role for local and regional institutions.
an proH I .
col .
1
d
1
nlent "'eek to under tand and cxpJatn longer tcnn. more dur bJ
e eve op . . a e
. "- mJ of local and reg1onal dcveJopn1ent that Integrate econo .
and le darnagrng 10 . , . m1c,
. d . ental concern . u tamable fonn of local <tnd reg1onal developm
oc1al an em tronm . . . . . . em
ba'e become a ccnuaJ challenge for rcgtonal and JocaJ and policy.
'\\ eaker" fo.nns of u e and> reg1onal development
thinking and policy expenmentat1on '' nh concrete tnlttatt\ es. f ost-devclopmentalisrn
dran po'"'t-:structuralist tbeol) to critique the prevailing mainstream discourses of
'de\ cJopment' and to promote ahemath e. Jocal1y dctem1ined. sociaJ construction$ of
de,elopmenf ba ed upon both capitalist and non-capitaJist economic To
complete this ecrion on frameworks of understanding. the next chapter engages with
the in titution- of government and governance of Joca) and regional development.
Further reading
For a compJememary and general overview, see Aunstrong, H. and Taylor, J. (2000)
Regional Economics and Policy (3rd edn). Oxford:
For wideranging collections, ee Barnes, T. and Gertkr, (eds) (J 999) The Nelv Industrial
Geography. Regions, Regu/a;ion and fnslitutions. London and Yor'.r- )Utledge:
Barnes, T.J. and Sheppard, E. (eds) (2000) A Companion to Economic {,rJIJgraphy.
Oxford: Blackwell; G.L., Feldman. and ivf. (20(J0) The Oxford
.. of Econom1c Geography. Oxford: Oxford University Press.
cntrcal re\'!ews of recent .conceptual and theoretical approaches. sec Scott. A.J. (2004)
A perspecuve of econom1c geography, Journal of Economic Ceograph ; 4: 479-499;
A.J. L (2003) Regjons, globalization. dc,.cJopmcnt\ Regional
37(6-1): .) 79-.)93: Sun ley, P. (2000) 'Urban and regional growth. in T.J. Barnes
F
an E. (eds) A Companion to Economir Geograplzv. Oxford. f3Jackwell.
or synopttc revrews of kev c . 1 d .
1

M
. onceptua eve opn.\!nts m local and r{;gtonal de lopment see
artm. R. ( 1999) Jn"t't 1 . y....
E Sh d
1
uuona approaches m ..:conomtc geography'. in T.J. Barnes and
eppar (eds) 4 ( un r
d S I
') 'JlWll(J/1 to Geoora'Ph ()x f;ord Blackwell J\1artin R.
an un cv. P. (1996) p ...
1
, '
regional h au Krugman s geographical economics and its implications for
prnent t cory a crit 1 . . .
Martin R ,.. d S
1
tea assessment , Economu CPography 72: 259- 292.
' an un cy P tl998) s1
growth theo , d . ow converg'-=ncc! Post nco-cla:,sical endogenous
rv an re{!JOnal devcJo 1:.
R. and SunJ;v r> (')0-.;0
3
. pment, -conrJmic Geography 74(3): 201-227; Martm.
J' - J ) IJ-.=constn t' 1 '>'
Journal of Ec.onom G JC mg c u chaotic: concept or policy panacea.
On h . IC teography 3( I): 5-35.
t e conceptual hnkages to Jo . 1 . . .
(Jlasmcier, A. (2000) ' I . and regwnal development policy and pracuce, see
jcy', in G.L. Clark fvf geography in practice: local economic development po!-
(J:..tord: ( The Oxford !landbool. of Economtc
AsJoctatir;tza/ Lconom .. 1-.. nJversJt} f rcss. ( ooke. P. and Morgan, K. (1998) The

11
ms. Re!r!,Jon lnn(J\ at ion. Oxford: Ox ford University Press.
GOVERNMENT AND
GOVERNANCE
Introduction: States and local and regional development
The role of the state in sponsoring industrialisation ca be
. n traced back to th
century and beyond. Such Intervention in the economy ('. e nmeteenth
. . . was J requently a means of n' t.
building. Smcc the Second World War governments have inte . . a
. r\ cne tn the1r economte.;;
10 ensure JocaJ and rcgtonal development often reflecting . . .
. . . . . ' a commnment to hm1t the
"rowth of Jnter-reg1onal dtspanttes and promote the devel f
c . . . opment o rural areas.
Alt hough havtng c;ome success m shapmg patterns of local and TP
1
d
1 . . . eve opment,
as noted 1 ( hapter <.:entrahsed or fonns of intervention, pursue-d by
nat1onal pJann1ng and de\. elopment authonttes, were criticised for their heavv concen-
tration on the provision of physical infrastructure and. as we shall consider Chapter
6. an overemphasis on the attraction of mobile investment. Such an approach often failed
to close the development gaps between prosperous and lagging regions. The perceive.d
fail ure of such approaches, together with the challenges of globalisation, has Jed to a
growing emphasis upon bottom-up approaches to the promotion of local and regional
development. Such interYentions. in theory at least, tend to require strong institutions
of local and regional governance and to be based on local and regional participation and
dialogue. As \VC discussed in C hapter I, bottom-up approaches are concerned with inte-
grated k rritorial development focusing upon the mobilisation of local resources and
competiti ve advantages that arc 1ocally owned and managed.
The concern of this chapter is the government and governance of local and regional
dcvcloptncnt. That is. the development of institutions which are responsible for the
d
. . . . f f de 'elopment This involves the
cstgn, unpl cmcntat1on and momtonng o strategies o " .
)
1
f mment and local pubhc
vertical and horizontal coordination of dafferent eve s o gove
. . f , that need to be addre sed
and pnvate actors and important Issues o go\emance . .
b
. d I t is typically subJect to
Y new institutional fonns. Local and reg1onaJ eve opmen . d
. . 1 . ew of cooperation an
Increasingly complex governance systems often mvo 'mg n . . d. d
. . o ulations and asst t m JVI -
coordmatton. Such devclop1nents can serve to empower P P
1
d onal
. f what kind of loca an regJ
uals and communities to develop thetr own syntheses
0
.
11
foml of
d
. . Ch ter 2. Potentta y. ne\\
evcJopment and for whom that we d1scussed
10
ap the formation
f . t ciety and promote
governance can al so foster the n1obilisation crvt so . d social progre .
f
. b" . for economiC an
0
networks and partnerships that can provtde a aSJS
124
OF uND
t cd ,Hld the nc\\ n:gton,tf tO\ Cfll, \l) l'c
.. ..., trt: tWl L . ' ,,,
I I
.. r ... uch de\ dopmull.
11
... . th<tt ,, c -..hall bdn\\
")\\l' L and ch.t t'n .!(.; '
l
. l "Jth 11 nc'' < - .flt' form of the !--tcltc ,md then itnpltc
11

1 )n:u.' t. ch Ill ' , ons

- 0\ 'stf<'cl l ' :::- } 11 ... lt t l t t' '
ch.tptcr 1 t . c , It C'\dtntrles t 1c a1gUT cr " 1d trst. ,, t' . ,
. , , . ,
1
J dt:\ dPplllC nt. . . ' , , . . ll
tlx loc:ll ,1nd t t) one ot ll()\ L'tnant:t;. to ,t dcccnt rlhs ' d
.. of <l(.)\CnJillCn < o ' ' ..
Jllll' tilt! from an t ra :::- .
1 111
or t.'' en. nc\\ foe a hsn1 . l he crncrne
11
,. ,
1
..
.. . d nc" rcutOrM . . . e:- o
t' r,1 of de' olutJOn d - timll'\\ ork cncon1p,lSStng rnulttld) Instit utron
1 wee pr<n 1 c. ct , d
multrlc' cl g(n erne . .
1
d ,, clopmcnt at a range of scales frorn the suprat .
I aJ and rcvt()Ocl t . c. 1,)-
tor OL c ::-
1
F. tlh tht: chapter addresses the rclatronship betw'
. h, ndnhbourhO<)C lJl, . . (;Cn
rronnl to r t -=- ' . nl de\ dopmcnt thttt \\ c return to tn the conclusions
.. nd local anu tt:gWr ' In
dcmocrac _, d ....
C haptcr (. , t n the mwm!c-mcnt of local and cconon1ic de\ clopment \ a
The rok of gO\ cnuncn ' , .... .. . ' s
: ., \t . ) m the role ot go' emtnent tnarked the shtft from Ihe
noted m Chapkr - 3Jl r .... . .
.
1
t
1
. m to th tt of !!Joball m TabJe 2.1 ). In federal states such
ot de' c opmcn a ' .... .
. c and the United tcttc subnanonal or state go' emn1ents ha\ e al w , s
J'\ Brazil. ,ern1an)
piJ) cd a role in relation to f<.K'dl and rcgwnal de\ elopn1ent. As a _general though,
durin!! pt:nod national go' crnmcnh tended to take the leadtng role 1n planning
ccono ... mrc de' e1opmcnt. retkctmg the central role of the nation state in and
go' cmmcnt in the modem era (Dunford 1988: Lc Gales and Lequesne 1998). Powerful
""'
argument were ad' anced that the state hould act to regulate markets and limit thei r
c:--cc sc (Polan} i J 944: 1\ 1oggridgc J 973 ). whi1c others saw the growing rol e of the
t,ltc in economic management a. a threat to liber1y (Hayek 1944).
tate politic \\ere often a rcHection of class interests as expressed through
national political parties. and through corporati t structures of interest representation by
organi ation uch trade union. and a sociations, \Yhich directly or indirectly
\\ere able to influence rhe direction of go' ernment policy. Such class interests tended
to be underpinned b) upporting ideologies such as. in Europe for instance, social
democracy and Chri tian democracy (Therborn l 995). Politics during thi s era \\as
contained large!) \\ ithin a national territory and focused on the control of state power
within clear boundaries and nlles of SO\ crcignty (Taylor and Flint 2000).
!) pica during thi period, national governtnents of various political hues sought
actr\ely to mtcrYenc in the management of the econotny and the pron1otion of industty.
Infonned by the
1

1
. . . . .
. ; r macroeconomic t 1cones outlined 1n Chapter 3, 1ntcn enttons
mcludcd the use of tax a d br . d . .
. . . ' n pu JC expen Jturc decJstons on the part of govcmn1cnts to
mmntam htnh lc\els of effe t. . d d .
. .. o c
1
' c cman 111 the economy and. therefore, fu 11 en1ploy-
mcnt. l n Europe such inte .
'
r. n entt ons usually took place alongside the expansion of the
we tare state. In Latin Am , d . . . . .
t'. enca an Asta government Interventions \verc gutdcd by
' gtcs o trnport substitut' G . . .
1
.,
1
.
1011
O\ crnments also suppo11ed the creatton of new mdus-
IId c apacu \" by subsidising th d I
K
1
. c e\e opmcnt of key sectors of the economy. In the
c mgL om. for mstance th b dl II
known 'ts . K , . . . ts un c of state economic measures \Vas usua Y
after and marked the approach to national econon1ic tnanagemcnt
... c nor u \Vlr (CI . J I
emphasis on full ...
1
'
11
s
10 111
1990). The Keynesian revolution placed the
l:mp oymcnt as tl ... k . . . . . -
racy. This form f , . . l c ey tne,tns of reconc1ltng capttahsn1 and democ
- o ccononllc rcgulat' 1
dies nf F
1
.
1
.,
1011
acc01npanied the emergence of natlona van-
< r < tst mass product' . d .
1011
c.lll consurnption. Indeed, this forn1 of cconomtc
N S Tl T UTI 0 N S:
GOVERNMENT
. AND GOVERNANC E
. tgcrnent undcrpmncd the peri od t'
tll,ltl 9t'7 ( ' o economic )'
125
'
I
, 1970s (J cssop I ",/ ) . rouch summarises t\ . . . . growth from the 1 (}S<"'
t H.: lc sttuatt on thus: J . to
In those industrial societies which did not b,.
. .... , . . C<.:omc cornmun, , , .
was reached between capitali .
1
b . tl ccrtam social
. S U'itnCI)\ lnt'. , . . .
ocoplc. In exchange for the of the . and workmg
t . . capttalt st d
q
ui etentng of protest agatnst the inequalttie . an the genera\
. . s It produced b .
learned to accept ltn1ttattons on their capacit
1
. t usmcss mterests
. . I . y o usc thctr power A d d
cratic po lt ttca capac1ty concentrated at the level f . n emo-
h l
.
0
the nation stat , b
to guarantee t ose tmttatlons, as firms were largely subor . . c was a le
of nat ion states. dmate to the authority
(Crouch 2004: 7- 8)
As part of these measures, across the world fl
1
f
. . . requent y sought to shape
the geography o econon11c actlv1ty at the subnational scale I . f .
. . . . . n pursuit o geographical
cqutty states tended to shate the goal of redtstnbutmg resources t
1
.
. o aggmg or pcnphcral
reoions and sought to promote spattally balanced forms of devcloptlletlt
1 o . . a goa some-
times as. 'spatta1 Keynesian ism'. (Martin and Sun ley 1997). In this perspec-
tive, achtevmg regional developtnent contnbutcd to nati onal efficiency by ensuring that
all the econon1y' s resources were utilised. Go\ en1ments in newly industrialising coun-
tries sought to direct the development of particular regions often as a component of
national n1odernisation strategies (Dicken 2003). By providing infrastntcture and finan-
cial incentives. or, by implanting state controlled or O\\ ned businesses into part icular
regions, govemtnents sought to pron1otc the de,elopment of lagging regions and deal
with the decline of traditional industries. 1 he policy mechanisms used by national
governn1ents during this period are sketched out in Table 2.1. For practical purposes,
govemtnents often created specialised agencies to promote local and regional develop-
ment such as OAT A R (Delegation a /'amenagement du territoire eta faction n?giona/e)
in France, Ia Cassa per illvfe::zogiorno in Italy, the Tennessee Valley Authority in the
United States and the Japan Regional Development Corporation. .
The broader activities of oovemmcnt can have in1plications for local and rcgtOnal
. .
0
. t bly the United Kinodom in
dcveloprnent tn 1n1xed economies. ln sotnc countnes. no a .
0
.
1
d. b f public expcndtturc and
recent years, arguments about the geographtca 1stn utwn o ' .
. . h . d politicall) contenttous (see
Its local and regional development 1n1pacts a' e pro\e
MacKay 200 McLean 2005). . f proores-
. . . G 'nerallv the mteractwn o :;,
Fiscal policy has local and reatonal unpacts. c ;, . . , f.
. . . . b . .b . effect. actmg an automa IL-
stve taxatton and public spendtng has a redtstn utn e . " . cnditurc on
. , rovernmenb mcrt;ase exp
stabihscr of the economy. Thus, for mstance, g . h t
1
t that uncm-
. . sston and, to t c ex el
unemployment benefits when econon1tes arc m rccc. . . esourcc" arc chan-
1
l"fes and reowns. l .
ployment is distributed uneven I y betvvecn oca
1 1
o
1
then. can
t Govcmmen '
nelled into those rePions \Vit h higher unctnploymen
1
4 1
the l
1
f
. d T I r 2000). Ftgurc . . . > , I ,
act as regtonal stab I hsers (Armstrong an ay
0
. ... lation tt) t d )I luH:
. . . . . bl ic tn . . . . -
Italy where reg tons wtth the h1ghest lc\ els of pu t' distributttH1 b ll\.t:lll
h
. . . tl at a degree o . . ..
t e lowest levels of GOP per head, tndtcntmg
1
'"' . d in their allocntwn Cdll
. . . , d the formula usc .
nng. But the provision of pubhc goods an
- .

O
F ______ _
FRAMEWORKS
. . tr' , isibk in the Unitt:d Kin!'dom \\here tl
_ 1 ht:"iC.: ' l. . h.'r\:
P
roduce rc!.!tOnnl . .
11
of public goods. such t:ducattOn he
11
.... . I , ""f ctpltcl pnn rsw . <I t l

1
,-c.: '" t lC ' . . b por)ulatwn and on I) loo"cl) relate-'
' . ' lv trc dtn<.:n ) u to
...en ices. \\ hlt.:h pt tman - , tll'l' be accentuated "here trHcr-rcgton;.d trmsf'
. ? 'i) Such h.:n ... wn.., '_1 ... ' '-Is
nec.:d' (rdcLc,w _00. J. _ hcd r
01111
.., of g(ncrmncnt ptO\J<.ic polrt1cal \Otcc t
. , . and where o<:' <> '-': o
lacJ.. _
1
bl c c\pt:nd1tun;. Uy 1Cderal states such ..
h distributiOJl <> pu
1
. as
challenge t c , ..
11
,
11
.
1
, .c more cxpltcrt mcchantsnls for distribut'
.. .. . d Gcnnan) gcncttt ) ' . . . . tng
\u"tralttt an . . ,
1
and cnsunng and tcrntonal solidar't I
rc.: ...ourcc'\ between !>ubnall()tM ' t)
h !994 \11d can 200t). . .
(Smtt .
1
., .
11
d at cnccting O\ craiJ levels ol cconon1tc activit)' Jn
M . ) conomrc po Jclc\ ,lll c . dY
,}(;n. c . d . ,
0
. nal Jlllf'acts. or a central bank w1th a remit to main-
al\o have loctll c111
1
' fl
. . , . mtcn;st tn order to dampen m atronary pressures in
rain ,rabk pnccs ma) w . . ., . . . a
. ,
1
but the dfech of thts mtght abo be felt tn laggmg where
fit..,r growmg . . . .
. d.t
011
.. ma)' in tact calJ for a demand sttmulus and the con1pcttttvcness of
cconom rc con ' 1 .. .
b
n 's'- nlU) lK' -
1
dvcrsd) a fleeted by exchange rate apprcc1atton. Such a see
C.\pOJ11flg USI -:> ' _ -
nario characterised the United dunng the 1990s. A stnglc nattonal currency may
operate a territory whtch contains in economic con-
ditiOns, but the intmductwn of monetary umon wtthtn the f:. uropcan Union, involving
t
1
.vdve Member States. extends a single currency over a range of econon1ies with qUJtc
stgnifkant in of industrial structure. The critics of monetary union argue
that a single interest rat<: poses particular chall enge!> for lagging which lack the
capactty to adjust to thl: nc\\ economic conditions (sec Atnin and Ton1ancy l99'5a).
go\cmmcnt policies can have 1oca1 and regional effects. In the Un1ted
States and the United Kmgdom. tor instance, governn1etH expenditure on defence
cqwpmcnt has had pronounced rL'gional effects generally fa\ ouring prosperous high-
tech regwns as the R&D intensity and sophi st ication of defence products and services
80
70
60
50
Expenditure(% of regional GOP)
Sardegna
Calabria
Basilicata
Sic1ha
Puglia
campan1a
Molise
Abruzzo
80
Lazio Valle d'Aosta
70
Liguria
Umbria Friuli Venezia Giulia
Trentino Alto
60
Adige
Lombardia
Marche
Toscana
Pie monte 50
Emil ia Romagna
10 40
15
20
25
30
GOP per head (l: U R 000)
Figure 4.1 Public expenditure a
. Euro')t:
111
Co nd GOP per head by region in I taly, 2000
t " rnmiSSIOn (2004: gO)
.127
. . In ">LtCh regiOnal ,1011 .
.
1
<:.y can act as , k"
1
.cy' accentttattng rather than amchoratt . a tnd of counter .
po 1 ng rcg1ornl tn . -regtonal
Markuscn \ 99 l ). . , cquaht ies (Lovering 1991;
In there t S tnorc to the government action i ....
I d l n locahttcs and
I cal and rcgJOna eve opmcnt poltcy. V trtualh . l1 h . reg tons than simply
o h . l . - <-l t c act tons f ' .
hen t cmsc ves arc una\\ arc of it _ h
0
governments_ even
w tl\ c local a d
Traditi onal forms of governn1cnt intcncnhon ., . <n regtonal impacts.
. pt a . ,
economy and sovcretgn state a dclmcatcd political , . . sequc'\tercd national
. . . -cconomtc space tl . .
ffccts of pohcy mterventtons and nationally foe
1
. 'd d 1at contamcd the
e . t sc emand manag, .
nationali sation of both and governance tn' 1 d h . cment. The tntcr-
. . ar"-e t e penod f h .
the 1970s (Held 1995: M tchtc and Grieve Smith
1995
.
0
k rom t c end ot
' 1c en 2003) Tl ,
rary govcrnrncnts face new challenges. vtulgan has argued:
1
us, contempo-
No\:v the pct1inence of the nationallc\ cls of polltlcal ec
1 . . . anomy 1as been
by a globahztng econon1y, by localt'im and b) the fai\ur' f .
1 \,; o nattona govern-
ments to solve the they thcm5eh cs Indeed a\th l h .
. . . . .. , oug 1 t e nat 10n
clearly rcn1a1ns the prc-emtnent poltttcal entity, it is in secular retreat.
(i\1ulgan 1994: 12)
Such tendencies have unleashed profound changes in the government and governance
of local and regional de\ elopment.
From government to governance
arc at least three in1portant tran<)fon11ations in the state which have a bearing on
the govcrnanc<.! of local and regional de\ elopmcnt. First. there is a shift from govern-
ment to go\ cn1ance on various tenitorial scales and across various functional domains
(Jessop 1997). The central role of official state apparatus in securing
economic and social projects and political hegemony has dimini::,hcd in rdativc
I
1 1 n nental
nstead, there ts an en1phas1s on partners 11ps oetwecn gover t < ' t '
d
. . . h. l l .. t t is often only 'first
an non-govcrmnental organtsattons tn w tc 1 t 1c sac a ' ' .
f
. \fp}C what Jessop
among equals. This involves the cotnplcx art o steer mg mu
1
e
. -
11
, t nornous from one another
( 1997) calls ' rneta-governance' - wh1ch arc ">pcratlona ) au
0
.
l
I cth itics pre\ tOusly under-
but loosely linked tooether and reliant on ot 1cr.
1
v an) ti
. o . , , '\tents to ann 's-length agcn-
takcn dtrectl y by the state have been devolved to vary mg c . . . h ... and
. . . . . . " h, . If ganisnnon ot pat1tld!' tp
ctes. The role of pohttcal authontt cs ts to "tccr t c
01
.
1
,
1 1
> ( 1996: ce
r ' ' 1t' accordwg to ... )(}( c
networks a kind of ' governance \Vtthout go\ t:rnrncr '
Example 4 I ) tate "ith
. . . , 'I out' of thl: natH>Il
Second, there IS a general trend tO\\ ards the
10
. .. l r ndionallv on suh-
ld
. . . , i t rntorwll) dlll u ,
o and new state capacities bclllg rl:organtsct l:
1
- er't:" np,\atd to
. . . I' . Sttte t. P . .
national supranational md trans-tern tonal '
1
r 1 to
' . JMF
supranational institutitH1S like the Luropcan l)n10n (H k1 ' ,
1
ucmpts arc mn i b)
d
. . t ) . i a I net'\ l t ' . 1
an local bodies and sidc\vays to trans-tl..'l n {
1
: cth c op t-attona
. , . . , .. .1 nhanc, th<.:lf rc
state n1anagcrs at dt tern tonal to
UNDERSTANDING
FRAMEWORKS OF
. tics of
,
Example 4.1 --:=: C:::::-: h=== aracterts
1
.
1
of go\ crnance' including intcrct ,
. . number o t 1< ( - ... l:-
Rhodc' ( 1996) Jdcnttfic,. a . ns G(n crruwcc ts hroadt:r than go' crntn_ent. CO\ cring non-
pL'ndcncc eL'n organt!\tttto . , f the ,t,ltt: tnL'<tnt the boundanes bet\\ ccn publ i .
. (J n()' the boundnrtl::. o . . ( "' . . . <.:,
state actor!\. Chan=' "' l , , >ll1C and opaque. onttnutng mtcractioJ ,
. . 'ctor' IHl\ L 1CLt ... ls
prn ate :tnd \ oluntar) c . , , ..
1
b\ the need to C\. changc resources and negotiat
,mbcrs a t l cnust< . c
bd\\'ccn nctwor . . ,
1
c)ns rooted in trust and regulated b} the rules of the
, . Gnmc-ltkc unerac ' .
shared purpo rc .... d l , net\\ ork '>elrticipants. Such ncl\:vorks huvc a \ ignifi.cant
t' . ted and aor LC >\
game. arc ncgo ra , c t , t ;c \ Ct\\ orks are not accountable to the state: the) re
, q, f . utononl\ from tH.: ,l . . . , . , . . . .
dt:gru.: o ,.1 h h t t, do's nor occup\ a pr" tl cgcd. ct ct gn pos1tt on it can
\ lthoua t C " d c "' '
1
::: - .
. . , . I . d impGrfectl) steer
tndm;ct ) ,m Source: Rhodes ( 1 996)
. d stratelrjc capacities. Finall), according to Jessop, the intcmationtl
uutonomtc an e ' . . . . <
conte\ t of domesti c tate action has grown m unportance Jead1ng to a sttuation where
economic and social policies become more concerned with ' international competitive-
ness '. At the same time. the roles of national govcrnn1cnt are now increasingly affected
by the regulatory functions of internat ional bodies. Such bodies include the IM F, World
Bunk amJ WTO. and organisations such as the European Uni on. NAFTA. ASEAN and
'vfercosur. Thu , both the globalisation of the econotny - especially the ri'ie of global
production net\\ orks and global financial rnarkets and the gro\vth of inten1ational insti-
tut ions seeking to address i sues beyond the scope of individual nati on states (e.g. trade,
em ironment terrorism) ha\e occun-cd sin1ul tancously and have placed constraints on
the acti\ iti e of national go\ in the area of economic regul ation. Jessop ( 1997)
codi fies these changes under the rubri c of the shift from a Keynesian \Vel fare state to a
Schumpetcrian workfare state.
This transfonnati on of the state, incoq)orating the shift froJn goverm11cnt to gover-
nance, can be identitled in nwny di ffcrcnt states, including ' transition ' countric<.t and
those lormcrl y regarded as ' newl y industri ali sing' (Dicken 2003). Above all the notion
of go\ ernancc refers to governing styles in which the boundaries bet\veen and wtthin
and pri\ate sectors haYc becotnc bluncd. The focus i on governing n1cchanjsms
do n.ot rest on recourse to classical ideas of state authority and sanctions. but on
the llltcncttort )f' It 1 s
. ' ( mu 1p c actors . . uch forn1s of\\ orking are generall y seen as rcqwnng
fugh levels of trust between the in\ oh cd to be cffccti\'c, and the task of govcr-
that of steering net\\ orks' (Stoker 1995 ). Such of govcnlancc.
wh1ch are , tl , 1
. l: \ \
1 1
m,magmg an mcrcasingly fragmented field of pubhc po rcy.
have b \:CJl ltnkcd bv sc t , 1 . , . . ... ety
.} ' )tnt:
0
stml ttl processes of fragrnentatJon tn post-n1odcm soct
( l3< >gm;on ).
One danger in di .. . . . , h t this
sutssron nf the shift fronl govcrntnent to governance IS t a
d(!vdopnH.:: ut a , , t 1 j . ken
" ._ s ura atH than the product of dcct stons ta
o/rcn above 'lll bv . t' . 1 thts
. ,.. ' . ( ' .. ntt tun,l state actors. But C\ en those \\ ho itnpli citly welcome
siHfr rcL:ognrse rhat it is assol.:i atcd with ' diletntnas' incl uding a divorce between the
<;.;.
INSTITUT I ONS
. GOVERNMENT
. . . . AND GOVERNANCE
\JJk' rcalt ty ot dcctston-n1aktng unckr tl
(t)ll . h.: new gov ,
. tslil) l f ()\ the blttlTmg of rc,p ' b . . and the la
tll .1 ' r: , . .. , tithes th , nguage u cd
. . and ot tnutu,1t po , , ltt \:an lead to a,od
l \\ \.: f dcpende . ' a nee or
obktll of untntended 'Sdf-n . that cxace b"
pt . . . nctwo k . r .ttc the
ountabi It t). \\ htch rneans that m pt act tee t
1
" difficuhic
ace " ecnng nov,. over
I
JrO\ C difficul t ( sec Stoker 1995) . . \ bo\e all , an\ un c- i:s likclv to
. l . J t:\ Cn shtftsto l J
continue to t 1C tntegral role of t . governance mu t
ffi 1 \;; \.:ll , C\pCc tall v 1 .
The practtcal dt cu ttcs of the emergent net\ 1 , ,
1
at t 1e nat tonal \c, el.
. \or" 'i o t go\ cnn nc , . .
" think about partncrsh1ps. Partncrshil)S arc .
1
t t t l revealed when
\ \ t,; \. l)O ov \\'htch tl .
n
ancc is n1anagcd. On the race of 1t, the term , tY\ t
1
'c new rcg11.mu1 govcr-
t 't nets Hp' holds \
more inc lust ve dcctslon-tnak 1 ng. I h.)\\ C\ cr rc\ iC\\
1
, .
1
" out t 1e prospctt of
. . ' "g CVl<. cnce fr :-, . ..
G
eddes (2000) has tdentrfied son1c danncr"' in the \ t e f , l.m ,\ttnss Europe,
, . e :s o partnersht ' 1
for local and rcgtonal de\ clopn1ent. He c;ugncsts tin t part , . " p., a t 1e vchtclc
. . . o . " " often exclude the v
oro ups at w htch they ate targeted. \\ htlc the a 1m of partne ,.
1
. , . ,., cry
c . , . Hps ts to engage non- tate
actors 111 go\ ernancc. frequentl) pa.rtncr!:.\htps dominated b , tl , bl' .
. )
1
C pu 1c whtch
has the capac tty and resources to de\ otc to the task Partner 1
11

1
.
< s )S, mot cover. are more
oft en a vchtcle for rnanagtng dtstrust rather than fomenting trust M
1
.
1 . . . . argma tSC< groups
find 1t as d1ffi cult to tnfluence partnershtps as the)' do shte
1
ctot\: Stok, .. f
questi ons about the efficacy of

4
l o} . l:t a set o
Is it possible for elected offl cials to exercise "ome control O\Cr the partnership
networks that constitute the en1erging system of local Can the
achi e\ erncnts of partnership be evaluated or docs it run the ri sk 01' bccomim.!.
an end in itself? Can the d) namics of governance be reconciled with the
tradi tiona I concerns about accountabil ity and propriety in public ?
Do the pat1nerships de\ eloped through govctnanee undermine democracy by
restricting acce s to ' insider' groups. leaving other interests underrepresented
and excluded?
(Stoker 1997: 48 .49)
. . . l 'l
1
e)' 1re a matter for t:mpir-
The answers to these questtons cannot be gtvcn a puou. ' ' .
. t tl , t the move to partncrshtp
ical vcritkat ion, but there is enough ev1dence to sugges la .
. . . , . . l .. tl solutions to problems
forms of governance contatns ne\v dtfhculttcs tat 1cr lan
of rcprcsentat ion and goven1ancc. . k t'onn of go\-
. . b tl , , nergencc ot nctwOl . ...
There ts nothing inherently dctnocratt c a out lC ct . ?S) tl, t is under the
. . ., . I ,, (Jessop }997. 5 , la ' .
emancc wht ch occur n1 the shadow of
1
) . . c
011
the ubject
. .. .
1
. , wer much
dmntnation of traditional fonns of authonty.
1
' bl' . _. tor along the
t' ficauon of pu tc
of governancl! can be reduced n1crcl y to a JUS
1
... d wi th the introduc-
. . l . l ri nci pall v concct nl: .
hnes of the nc\v public 1nanagcn1cnt w
11
c
1
P ". ,
1
n wi th the pri' ntt sa-
. . . r bl ic ong .
hon of market princiJ)lcs for the provtswn pu
1
ol)o ce a lSl) K1 a: r 200
4
) .
. . . . ( R bodes .., >.
tton and agenci fi cation' of puhltc admuHstt at , , '\ ati\ gov to
S
. . . II 1'lllll)' by t 'ht
uch developtncnts \vcrc a response tn ttta y,
11
t . . -,
1
d the Ulll oug
.. ti c mstttu1JOI1S ell , s of
apparent decline in the effectiveness ot dcmoct .
1
)llin" baLk the ft\mttet.
. t , conomy fUll fl ::;, '' 1s "
a solutton to thi s J)roblcnl in t lC t;; that "Go' mane
... ,., - ndeed
the state (sec Gatnblc I 994 ). Kc:at ing (-
00
) ),
1

'
,
UNDERSTANDI"JG
-
130
FRAME\VORKS OF . .
. f (() htdc ... qutsttons ttbnut the hJ
. , t tnd I!- offl'rl ll"t.:l _ cl -
n loose concc.:p. t' tntc:rc:-;ts and the nt poltL'\ l lo\\ e\'
t
1
, n:"entatwn o . _ cr
rtn<X of pO\\CI'. t le r\,;p b IJtlltL' t()r ''0\ l'flHHCllt ( f-... cattng 20()): 108)
' I .. ..-J uoycnwncc: t!- not ' -..u " :::- , I 1 St ' , . . . -
ronccptua :::- . , t ,, as <Ill( o"-t:t ts tnuch mop
. f tor rhc stcltL )\
The role ern rsagcc . _
1
, , n 111 mnn) throughout the pcno
1 . 1 , rc dtrccft\ e !l) t gt t
rcstnctt\C than t H.:
1110
1
r )llS of nnd go\ crnmcnt arc
f \\ 'odd \\ ,H. llSfllll !( . ' tS
atkr the Sccoll( .
1
, tr()\ crnnnrc S) stem. But accordtng to Stoker ( 199S)
. . rant Ill t lt.: llt \-\ c- . . ,
playrng rrnpor , , r b) pn)\ iding lcadershtp, formtng partnerships and
. I .. ystcm m<uwgt.rn<.: tl . . . . .
thcrr ll> L I s ' . . 'nt b)' sttuattOns. Jdentt fytng stakeholders and
I . th" O\ cntl l ern . .... . .
rcgu <lttng t: . . b 't\\ ccn narrtcs. The ' new reg10nahsrn and new
' anino relatton::-.htp:-. l: t f f
rnnn /:7 o tl . 'Cll
1
.._ o1 these emergent onns o governance
locnli"m arc trcqucn ) fi .
' . , t th rlC\\ of go\Cnlance ha\ c o ten emerged alongside
Indeed. the C\ pcrunt:n "' \\I - . .... . ,
. t'
1
r. J or ddrmtll tratrYc pO\\ er 111 many states 2004b ).
the de\ oluuon o po t tea
'New regionalism'?
1
there something perhaps about popul ati on un its of around three to eight
million (the site nf man} U regions of larger European states, or the
small European nation tatcs themselves) that make poli cy-making between
public authorities and bu organisations parti cularl y useful and flexible?
(Crouch and Marquand 1989: x)
Jrcnd toward the of go\emment are di scernible in different political
contt:\ ts includi ng A ia. Europe, Australia, Latin Ameri ca and North Ameri ca (Keating
1998: J<l\ed Burki et a/. 1999: Brenner 2002: Rozman 2002: Rainnie and Grobclaar
2004) and in de\ eloped and de\ eloping countries (Bard han 2002 ). Despi te important
di ffcrcnce.s bet\\ een di ffercnt nati onal ci rcumstances son1e writers have identified the
emergence of a new regionalism (Keating eta!. 2003) and/or ' new localisrn' (Goet;
and Clarke 1993) linked to a newl y attached importance for subnati onal government
by intcrnatjonal organi sations such as the OLCD and World Bank (e.g. OEC'D 200 I,
2004a). As we discussed in Chapter 3. ne\.v regionalisrn ' connects with the renewed
emphas is upon the region as the locus for econornic, social and politi cal action and the
of institutions in local and regional de\ elopment.
In the global context of the ' new regionalism'. the trend towards decent ralisation of
government is dri\ en to a large extent by political factors at the national and subnational
level ( Rodriuuc;-Po , " l1 f ( '' II ?()()4)
1
. . .
e sc" <. J l - . n countncs such as Spa1n and Bran I. the crcattOn
or strenuthcninu of strll' 'tl , . f . b I .
. o o "' trl:s o su nat rona go\ crnance occurred alongstdc the rcstora-
r um of dcmocn cv foJ 1 1 . , p
. , - O\\ mg ong penods of authontarian go\ crnmcnt ( Rodngucz- ose
I Rodngul'/-f>os, 111-
1
1 19 K "'
. l.: ( u om,mcy 99). A S11111lar story can be found rn South ort.:a
(sec ChaJ)fcr 7) r tl " lJ . . I .

11
ll: nttcu Kmgdom. devolution to Scot land and was a
r\:sponse to the ri se of ntt . ,. 2()00)
. ... (.
10
tht tst scnt 11ncnts m a n1ulti national state (Tomaney
l.lscwht! t\!, 111 1-uropc h t : .. 1 . h'le
rs
0 11
<.:ct n:g10ns have asserted their cultural tdentJtH:S: w 1
l!mcr"cnt or new' ' cc )rl . . . . , }o
. . o . t omrc regiOns Inspired hy the ' new regionalisn1 have as
clauned the nght to te l f' . , tl I . K ( 1g
L ( Ucc Y Ill t 1c1r own political interest (Han ie 1994: Celli w
.--------' -N_STITUTIONS: GOVERN
MENT AND
C)v
1
oughlin 200 1 ). In the United <;tatcs th .
llJ o . - . c n sc of n
>tl "'C to the raptd growth of the ere . letropolitan rcgionali ..
. . . . . . . . . atton of .'atelr . . m ' a
. ort '\tr on. tncrcascd mobthty o1 cttl/cns 'lnd . . tte C1ttcs. new m d
1nnsp t b . < e<tstcr forms f . o e of
.1., , ne\\ etwcen the ctty cow
1
t\. . d
0
communtcation , h. h
Jan state' (tv , 'tc
l3
nJamin and Nathan 2001 ). \It ore generally, the trend t l l 1t.llcr 2002: 1: see al so
l,; d f' 1' 1
0
<. cvolutto
. of central tse onns o po and go\ crnmcnt .
1
. n tnav reflect a reicc-
uon . . at t 1c nat tonal l
f;
'th in the natton state as an mstrurncnt for soh in . e\cl and declining
at . g soctal and .
. . ucs to which we wtll return. As l'ablc 4.1 il\ustrat , . . cconomtc problems _
rss f' f . . 1 egtonal stn t
c then arc a cature o an mcrcasmg numb"J C)f tc urcs of gover-
nanc ' "
Although the nature and sources of the tlC\\ regia . \.
. nd Ism varv sinnifi. I
its growth reflects a wtdcly held belief thn tl , . b cant Y between
sol: . < lc rcgtonal scale (
1 ati on state) represents a particularly c;ahcnt \calc at wh h . or t 1e small
n Ic to orgamsc policy . t
tions in the economy (e.g. Crouch and Marquand 1
9
R
9
) Such . tn ervcn-
. 1 l . . . . a vtcw rests on the id
that local and regtona supp y-s1de condtttOn\ help to dctennin th . . . ea
f 99
. . e e <:ompetthveness of
fi rms. Thus, Scharp ( 1 1) at gues smaller nat1on states in F
1 . . . . , . . ..uropc at cast, appear to
enJOY h1ghcr leveb of pohttcal approv<ll and cconom
1
c 'sue .
1
,
1 c t Mn urger states,
perhaps because of:
their abi I ity to conduct pol icy discourses that are ba5cd on those policy alter-
natives that arc based on a realistic tanding of their own capabili;ies and
constraints and to focus debates on those policy alternatives that might be
p . liament in Edinburgh
late 4.1 Devolved government: the Scottish Par
Source C s 06)
cott1sh Parliamentary Corporate Body (20

FRAME\\('IR:,s O LII\DE:.RSl 1!'\G

. b f nnl doremment in OECD countries and In South Afric
Table 4.1 Reg"tonal and su nn IO o a
- P /"' tion Number Population Notes
opu" ..
(millions) of regions per
1997
(mil/tons)
s, .. lUth a full system of elected regional go\'vmment
?
66 8
50 5.3 Fifty federated states
untted States -
1?6 . .2 S/ 59
Eight reg1ons. subdi\ tded Into
09
prefectures ( 4 7) and Cities (
12
) with
the same status as prefectures
Mexico
Gem1anv

France
Italy
Korea
South Africa
Soa1n
Poland
Canada
Austalia
Netherlands
Greece
Czech Republic
Belgium
Hungary
Sweden
Austna
Switzerland
Denmark
Finland
94.2
82.1
63 ...
58.6
56 9
46.0
43.4
39.3
38.7
30.3
18.5
15.6
10.5
10.3
10.2
10.2
8.8
8.1
7.1
5.3
5.1
32
16
80
22
20
8
9
17
8
13
7
12
51
8
3
40
8
9
26
14
19
2.9
5.1
0.8
2. 7
2.8
5.8
4.8
2.3
4.8
2.3
2.6
1.3
0.2
1.3
3.4
0.3
1.1
0.9
0.3
0.4
0.3
States with no, or limited, elected regional government
Portugal 10.0
United Kingdom 59.0
Source: Authors, own research
Note: OECD countnes with populations exceeding 5 millions.
Thuty-two federoted states
Srxteen Bundeslander
Erght} provinces
Twenty-two reg1ons m metropolitan
France (excludes overseas
possess tons)
Twenty regions
Erght provmces
Nine federated states
Seventeen autonomous communities
Eight provinces
Thirteen federated states (10) and
territories ( 3)
Seven federated states
Twelve provinces
Fifty-one prefectures
Eight regions
Flanders. Wallonia and Brussels
Forty counties and muntcipal
counties, includmg Budapest
Erght regions
Nine Bundeslander
Twenty-six cantons
Fourteen counties
Nmeteen regions
Pnnciple of regronal government
rejected in a referendum
Elected regional governments in
London. Scotland. Wales and
Northern Ireland
-
-

INS11 1UT I ONS:
GOVERNMENT A
ttiH.I m an intcrntti I NO GOVERNANCE
. . . ona policy . .
t by hr gh tkgn!cs of tnstitutiowtl . . cnvtronmcnt th t .
133
l . c tntcgratto a ts char
.
111
d rcguhtt nry <.:nrnpctttton. n. economic int. ,1 ac
'
. . . (Scharpf 199\: 120)
I 1
ns we 111 C haptcr 3 cffcctiv.
nc t: . c governance } .
ndcrpinntng the performance of rcgi b ltts been seen a fa t . .
u . ons y provid. cor tn
tion of skill s, tccbnologt <.:al change and the nurtur f tng suppon for the form
h
h . tng o the natu . I . a-
mcnt and tbroug t c prornotton of 'untradcd intcrd . rd and butlt environ-
. . . . 1 . cpendcnctes, t\ .
markets, publt c mst1tutrons. ru cs of act ton. under .
1
. d'
1
at mclude labour
. . s an tngs and v l .
IJ7). It ts m1portant , however. not to assume an c .,, . <t ues {Keatmg 1998:
. as) causal relatJonsh. b
,
10
yernancc and cconom1c success. Structures of go ,
1
P etween 'good'
::> 'ernance undoubtedl h I
P
atterns of local and economic de,elopment but. con,
1
. Y e P to shape
d
. . 'erse y, effetllve form f
nance are often un crpmned by strong economic perfonnance so
As we explained in Chapter 3, regional level instituf h.
. . lOns, t erefore are increa . I
seen as a necessary mgred1ent of bottom-up forms of regi)
1 1
. . .
5
mg Y
. . ( na po Icy m an era m which
localities and rcg1ons are more directly exposed to the inte t.
1 . . . . . rna tona economy. This
changtng context seeks to rnob1 hse loca!Jttcs and regions 'ts aoe f h .
' e n s o t e1r own devel-
opment. llarvcy ( 1989a: 6) argues that the role of the local state has h'ft d
' , s t e 'rom one
of local managctncnt of the \vel fare state aimed at cnsurino r-d
1
-tn.but
1
b d
s -.. ton o one asc
011 cntrcprcneurialisrn', whereby cities and regions directly compete with each other.
Such entrepreneurial ism needs to be CAatnincd at a variety of spatial scales _ local.
neighbourhood and community, central city and suburb. metropolitan region. region,
nation state, and the li ke' (Haney l989a: 6).
According to Keating, the nev\ regional goven1ance tends to be underpinned by devel-
opment coalitions vvhich comprise a cross-class. place-based alliance of and polit-
ical actors dedicated to economic growth in a location. its composition varying
from one place to another (Keating Keatmg era/. 2003). Such coalitions tend to
be embodied in regional institutions v. hich provide public goods and dialogue
and con1munication among cconon1ic actors in the region. Local and regional political
leaders become important figures in shaping development coalitions, albeit compelled
to act in concert \vith other actors within multile' cl and multi-agent gO\ emancc struc-
tures (e.g. llanie 1994 ).
P
. . . .
1
. . [! egional oovemancc arrangc-
ohtJcal structures prOYtde democratiC eg1t1macy or t o .
d. rsitv in the forms ofpoltt-
ments. but even within Europe. for instance. there IS great t\e - ,.. .
. . . . f I .. I and regional gO\ cmmt:nts
1cal stntctures and the po,vers and rcsponstblltttes o Ol:a . .
1
t
. . of deccntraltsatton t la
(Keating 1998 ). There arc some common trends
10
the process . k, their
I
d . >ional govcmment ma c
can be observed across the world. Man} loca an reg , Tl ,. of
. . .. . . I d velopmcnt agenctt: S. lt:
economtc mterventions through local and rcgwna e . bl r,.. t r he period
h
' t5 a nota e n;a u \,;
t e locally and regionally governed dcyeJopmcnt agcnc) f al dc,dopmcnt
. . 998) he grO\\ th o rcgwn,
smce the 1970s. Accordt ng to Danson et a/. ( l t . d .
1
pmcnt (Table
. , J to rcgwnal e\ co
agenctes (RDAs) draws upon a bottom-up approac
1
. l to cntrc-
RD . . . , . f the shi1t from manabl: , . . . I
As can be seen as a practtcal mant festat wn de,cl opmcnt ot rlgton,t
Pr
. . . . f . 1 1overnancc. The
eneunahsn1 tn the transforn1at1on o regwna g
-
1.3 I
'l \ NDING
S CH
FR \M E\VO R ., d
1
bottom-up policies and Institutions
....nown :md now mo e
Titbit' 4.2 rradition.'11 to,.,.. . JVcw model bottom-up
_ - . Tt.uiition top-down
-
('/1Bn-1 =
1\;,1t iondl
Pollttcal control
freedom
Economic ob ect'\es
Mode of operation
Policy instruments
llcl
lt department
GO\CI rH
Bur eauc
Genet alist qualifications
Adrninistrvtivc hier arctw <md
inft asttuctw e
Duectly through government
depdl tmcnt and rniniStt'l kll
responsibility
limited
Inter-regional equality
Growth of national economy
Redistnbuted growth
Non-selective
Automatic/discretionary
Reactive
Bureaucratic regulation
Financial inducements
Advisory services
Public provision
Source: Adapted from Halkier et a/. (1998)
Regtoncll
Scmtc1utonomous hocJy
(agcnc) p,11 tnc1
led
Spcc1f1c e\pf'r
Tasl-. led prOJt"Ct5 and teams
lnducctl through sponsor government
departments and weak accountability
st1 uctures
s length earned and
target based flexrbiltty
lnterreg1onal competrttveness ond
rarstng economtc performance
Growth of regtonal economy
lndrgenous tmported growth
Selectrve
Drscretionary
Proactive
Fmancial inducements
Advtsory seNtces
Public provision
k' d j urisdiction ... in policy-making n ffect the way pol ic) ob_1ccti' cs arc detenn ned
and the which arc implemented (e.g. Ton1anc) 1997 ).
J tu-.. ftk'll\ perh.1ps ,\ecckratcd the ... hi n away fron1 redi tributi \ c pol which .lre
aimt'd at tad.lmg intcr-rcgionalmcquallly toward' gro\vth-orientcd polici es focused on
't\'gJOnal competiti\ cnes di"cthscd in Chapter 3.
lhL' acti\ Jiles and acc1.)Untabilit y of RD.\ arc shaped b) the types of political struc-
or their that operate ut the regional Jc\ cl. One exarnple of these rela-
is pro\ idcd b) F R \l T (En!e Rcgiona/e per Ia Valori=:=a:=i one Economica de
Terruorio ). a de\ clopmcnt agcnc) that '' tts b) the regional g<.)\ cnunent of
FmiJia Romagna in 19- 3 foli o\\ mg the llr ... t de\ olut1on of political pO\\ cr to the Italian
regions in 1970 (Ciamlist.: 1994: Bel lini and Pasquini 199 ) (Figure 4.2). The W\.: akne"s
and of t ill' nation stlt c in Italy. in part \\aS a to action at the
regional cl. The ccntrali cd nat ure of the Italian polity '' (b during l'le
fi nal decades of rhc twent ieth cent ury as thl: p O\\ crs and profiles of rcgtonal govcm-
ments grr"w (Kecuing ). FR \ TT has att racted nntch international attention because
ib CITation was with the rapid cconotnic gro\\ t h in En1ilia Ronwgna. P311 of
the '' idt:r ph nnmcnon t)f the gn.)\\ th of the Third It aly based on ncournphtcalt y conccn-
tratrd and high I) prnduLt i\ e clusters of fa nli h .. -owned knO\\ n indust rial
i'- ts thnr "l' dtscusseJ in Chapter 3. Emi lia a region of 4 n1illion people.
b ""'
ANO GOVERNANCE
,
( l'ltdll\l lllll'
.,
-
(
Sankgn,a
M e tl
l
l'
. I
I

(
T l l Nl S IA
'
s \ '\
M' \Rl'\0
' '
'
' 1
I \
I I
} Umhria ',
t' ... ,.,
, '-
I I IL\,
- \ -,
Adrta11c
Sea
, -,
\ \ ' I \
.,_,..___ ' I
-,
I TALY
' ,. Abruuo
''
Rome , , ,-
.. #' \ ,, I
' I
' - c .Molise '
I I
"'\1'"" .. ..,,,
' ... '- .
,.-.......,..,_ ' ' I
tl
l
\ ,
Campan1a - 'i ,
.' -,, Pugha
\ '
t \I .., \
I
\ 1
'
' ;
I -.
I
Calabm
\
N
...
I
r0
I
\
I
'
kt!oll'Wes 200
Rgure 4.2 Emilia Romagna, Italy
t
. fi emplovi ng than fifty
. l 98 p "f cent o nn. . . . . d
has a distinct i,e econon1ic structure wtt
1
Brusco 19 2). Bdltnt 10
1 Emtl ian model ( . m 'Ill
people. somct itncs refcned to as t
1
c b.
1
.
0
,
1
go\'etn
. . l "I n a corn ma l .. d .. I ) a-
Pasquini ( 1998) defi ne the En11l tan tnoc t: as ' h.
1
.. the rcoion i:' ... '"1
. . . . 1 . cc .... .... s. Thus. w
1
t.: _::::
1
- ..
1
uv bv th('
soc tal tntegratt on and cntrept encuna . t: . , been domtnJtcd po _,
. . . i'tt onally tt h.ts . . 1\" FT ' ' ts p.trt ot
tton of successful entrepreneurshtp tt ac
1
1
") -reation of L R . . . .
-. . s Indct:d. t h; c . 1 \\ tth 111
haltan Cotntnuni st Party and tts . .-. litical 11P
. ) cement thl:tt po
an effort by the En1ilian Con1n1untst tl

I
O
F UNDERSTANDING
FRAMEWORKS--
. G , ( 1994) the Communbt P<lrt} Jnd its !'-Ucc,
1 distncts. . l:S\ors
the mdu tna ; tfl' hc:1rt of ,1 regional productn tt) coalitton' thr)
1
'
0
. . . R aana as ,ormlllf! "' ' ..... , t ugn tl
t.nuha om :::- ' J -d- nator' of groups incJuding the coopcrati\ , " lc
I, of mediator a no cOOl ' ' - t: tnove.
ro t: i I
" rf an associatwns anc cmp o_ t.: . ,
tnt.:nt. a
1
': k fER\'[ r is to nurwrc the de' dopmcnt ot the specialised
11
,
1
The matn ta.s o . , ,. , ,. , , . . c \\orks
1 . l 'fpin the r 'giOO S pr0Spt:I1f). f l!,UrC 4.J ShOWS the relat .
of, mall fi m1 t,lat unut: , ' . . , . , . lonshlp
.
1
no,crnmcnt and f: R\ ET ts an arm s- lcngth one w1th a di\
1
s
between the rcgtOna e- . . . ton of
b
.
011
r
1
ctl stral t'f!) and 'tcchntcal' exccuttan. l n pract1ce accotd
labour etwecn P ' ... . . . ' tng to
II
. . d Pa qut'ni ( J 99(,) ER\ El 1t elf has strongly tnfl uenced the tiirectto
Be tnt an , . . n of
. d Joptllent pol in because of tts accumulated experttse and its ann'
1 economtc c\ c . . .,- e lgth
relationship to the political make tt a the rcsol utton of contentious
i sue . ER \ ET confonn" to the model of a _partnership in \\ hich the
regional go\ emment take a majorit) take, but m whtch pnvate sector organisattons
Region Emilia Romagna ERVET
Policy guidelines
Evaluation of the plan proposal
approval and financing of
the first (50%) tranche
on reporting
ftnancing of the remaining 50%
Figure 4.3 The reglon-ERVET relatlonshl
Source: Adapted from ERVET p
Plan proposals, regarding
partially self-financed projects,
also based on proposals put
forward by the service centres
Implementation of the projects
by ERVET and/or other
subjects (esp. service centres)
reporting (results, cost and
revenues, evaluation indexes,
documentation available at
ERVET's archives)
INSTITUTIONS:
__ G_ OVERNMENT
. .. . AND GOVERNANCE
.
1
) partJ ctpatc. Moreover, LRVl:l ts the
1
b
' , , l 1U of a network .
111
pot1 the dcvc oprnent of key of th . of . .
. , , . , . l . c reg tonal ec , agcnctes that
t
o scn tees sue 1 as technology and tn k onorny bv tl
. . ttr cttng su ..... g 1c accc s
G ton has posed new challenges h . PPort.
. . . or t e l:mtlia .
ERVET ttsclf was cnttc1sed wtthm the region [! c:. . n model of small fatnilv fi.
d' . or tathng tor . J tms.
the new compcttttvc con 1t10ns, even as it b . espond qutckl) cno
1
. . , . \\as cmg lauded . ug, to
it s 1nnovau vc approach. The regtonal govcrnm . outstdc the region fo.
. 90 . cnt mstttutcd a D 1
network 1n the 19 s wht ch gave a greater role t t . re onn of the l.RVET
. . . . . o t lc pn vatc sector . h . ...
g
ics and whtch gave 1ts actt vtttes a stronger com . . m s apmg tts stratc-
. l d . mcrcJal oncntatio Th
local and regtona evclopment m Emilia Rom
0
n. c governance of
. aona can be seen a I .
of the European vanant of 'ne\\ regionalism it
1
h
1
s a c example
. . . ' \\ tc 1 elected r"
1
P
lay an tmportant role, albett m the context of cncr h' t:glOna governments
oac mg commercial
much writing about Emilia Romagna has
0
h d' . . pressures. While
. n t e tshncttve cha t f' .
industrial structure, Ganntse concludes that: rae cr o Hs
The real lesson of the Emi l ian model for other regions L: .
. .
111
LllrOpe can be summed
up m two words: progress!\ e go\ ernment. 1 mplcmentm , (' d .
. . . g ll1Iorme soctal and
econon11c pol1 cy and workmg through a productivit\ coal
1
't
1

0
'th
1 J n WI SOCia and
players, Etntha-Romagna has been able to effectively juggle the
deman_ds .for a prosperous cconotn), social justice and legitimate
pollt1cal mterventlontsm.
(Ganmse 1994: 158)
The role of regional goven1ance in the ABC region - comprising the municipalities of
Santo Andre. Sao Bernardo and Sao Caetano - in Brazil pro\ tdcs an example of the
devel opment of new structures of regional governances in a \Cf) diffe1cnt socio-
economic and political context (Rodrigue;-Pose and Tomaney 1999: Rodngucz-Posc er
a/. 2001 ). The greater ABC region. comprising se\ en municipalities. contains 2 mllhon
people in the south-eastern suburbs of Sao Paulo (Figure 4.4). The conte.\t for local and
regional development is quite di fferent from that in Emilia Romagna. Bra1il is a federal
state, albeit one that has experi enced a series of authoritarian governments throughout
the twentieth century, fi nally riddi ng itself of mi litary dictatorship in 1985. The move
1 B il is 'l vast md
to democracy saw a resurgence of the power of the BraLI tan states. ra; ' ' '.
. .
1
&-. d .
1
"' esents a practical solutiOn
populous country of I 70 mtl lton people anc te eta tsm rcpr ' .
f
p
1

1
If has a
1
)opulation of 37
to the problem of its goven1mcnt. The state o ao au o I sc
. . . .
8
.
11
. The \BC region \\as the
mtlhon and the ctty as a whole a populatton of 1 mt 10n.
1
. . . . . . .
1
t from the 1960s throug 1
economtc powerhouse of Bra11l dunng 1ts mdustt 1a ton . ,
1
. . , ' 1 rae automottvc planb am
Import-substitution notable for its concentratiOn ot vcr) k
1
. , Brazil ian metalwor c, untl)l .
thetr suppliers. The region was also the heat1 1and ot the ' . h, 'tion
10
. . . , , .. ' P rt)' whtch led t c oppost
noted for its militancy, and the Brall lt an \\,ort\cts a
military dictatorship in the 1970s and 1980s. . t '"' l990s The <kci-
T
. . . . ., hnncd dun ng t lt,;
he economic fortunes of the rcg10n \\ ete c . . .
1
) ti.)fdt?.n in\ est-
. h ... Brazt11an cconom) l .....
Ston of the Cardoso governn1cnt to open up t c c .
1
- ., such
. h Wing neoa 1\\: "'
ment and COnlpctition in the 1990s, together \\ It gro d b r 'ntng pollution, le I
b
. markcb an \\ orsc
as shortages and ri sing costs in land and Ia out
'

I
FRAMEWORKS OF U
'\ DERSTA'JDI NG ____ _
...)
, , I I (I " I i c
.-. ' c;t \\\\ ( HH'\(U
:
1
( ; tJ\'\\
I
\ \lRJ'\\,11 I
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)
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COl 0\181\ , \ ,
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O c ca11
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'- . ....,.., . \ dt-.._
r
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I I \ ' "- "" \
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r'
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Par.1
...
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I I ' I
I (
, c.tr.t
I
)
, I \
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, ... _, I - ' I
, .. .... , ,
\ \ I '- ,' I ' ..,. '""'
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.', ', ' ... , ,' . -,-', . ,. ...
' , . , I .., I _, ,,I" ,._
, \ , \ , ' , , , . --- ( ., ..
\
I \ , ,,. - "' \ I ,I \ , ' "'
, ' ; ... ..
I .,- - - - -- -- -- - I t I -- ,- ..,. ""
__ .. . -, ,, ' - \..' .. ,- ...
.:...._./\' ,/,.,......,.{ I I T I , ',. -- ' , oc:.1n n:. , , , ,
I "" ""' I ' at .... . .. .. I \ , .. '\
\ ' B R \ l I L : ;- :,
, "- - , 1' ,, ., , Bah1a
PERt..
(
\faw - - ,
' '-,( :' :
Pactfic
Ocean
I I , - t
(
, - ' ' - , .. ... \ , ,.. .... _ ,. ...
l. ---, , ,' ' Goi<b ?rasilla
I 801.1\' IA .\. - - - I '
....... , ' \ .
- I
. '
'
' I
'
I \ - - , ,_ _,, .
' I
,
\
Mina'
_,- ' I I '
Geru1s
\ ( f " , \tnt u
\ ' ) Do . ul
/ I spirito Santo
sao
' J-,r- 1 -
iio Pa ulo
l ( ' \ ,P \R\ GL \' ' R1 o de Janeiro
( '-.
(- " l Parana
) , ) r.
) I I ,.,,.
CHI L f (. _ (" ,! _ ' ' -,' . .
( -- / Sant a Cat:mna
I {
'
' J
: Santo Andre
Sao Bernardo
>
I
\
Atlant ic
\R(;[\fl\\
'
l,
0 <. ean
{ 1
I '
R10 Grande
do :--=one
2 Pnrniba
3 Pernambuco
4 Al acoas
5 Serg1pc
Figure 4.4 The ABC region, Brazil
an _economi c cri sis and unemployment in the region as large firms began to
the possibilities of relocation to other parts of Brazil. Thi !> de\ clopment was
accelerated by the aoorc s . fi
1
. . .. c
1
n
. . oe
1
' e sea competitiOn strategies pursued b) some stale-7
Bra11l m order to attract . r. .
. manu,actunng m\cstmcnt described in Chapter 2.
In th1s context pol"( 1 o to
, . ..
1
lea social and economic actors responded by attempttn::
dl:\ clop a ne\\ stratcuv fo th f t ke-
1 ld
. . e. r e region. drawmg on the support of a wide range o 5 a
10 crs. mcludtnl! u . rr rts
, .. . . . .. . mons. employers. NGOs and pol itical parties. In part, these e
110
msp1rcd and mfom1ed b k , f nC''
. ,
1
Y now ledge of the new regional ism and the role o
n:gJOna gon:mance arran , .. . . and
N h A . . gcments and rcg1onal development agencies 10 Europe
ort men ca. 1 he outcome f I . . of
. . . .
0
t lese dehberat10ns was the decision by the ma)
0

M!\ en munt<.:lpalltlcs to ter
promote a new regional institution, the Chamber of the Grea
-
INSTITUTIONS:
AND
\BC n.:g10n, \\htch in turn spon..,orl.! d the cr t '
GOVERNANCE
. I . . . c,\ ton of a regional d I
(
de /)e.,envo v1mento l:..conomtco do G .
1
eve opment aoencv
1Wzce ,18C)in 1998 e "
r gion4d dc\clopmcnt agency a decisive 'tit . . . . . The creation of the
. I . . , crdtton ot rcgtonal .

1
region, tn\ o \ mg a ")htft in concern from tl economac policy
tr . , 1c needs of larg fi ,
I
on of real \ervtces to networks of c; mall and
1
,., ,d c nns to the provi-
. ,e fi 1ms Th . , .
de' d opmen ts Wt 11 be felt only over the long term b t e effects of these
. '"' u ne\\ govcmance
thcmsch cs arc novel m a rcg1on traditionall y charact .. d b . arrangements
' Ctt sc Y tntense cl tr
and 1999: Rodri gue; -Pose et a/. 200 I). ass con tcts
The expencnces of Emtha Romagna and the (Jrcatcr ABC ....
f h ' , . demonstrate how
the pursutt o t e new reg10nal go\ emance 1s affecti ng t d'f'
. . qul e I tercnt parts of the
world. The umfymg feature of the two exampl es 1, a bclicfth t ,. .
1
. .
. . . . a n::gtona mstttut1ons can
P
lay an tmportant role 1n orgamsmg the suppl y-stde of the econom d . d"f:t'
. . Y 1 'crcnces
in natJOnal context. Both stones pro\ tdc exampl es of the shift from o .
. . co\emment to gover-
nance by drawmg new actors mto the proces<\ of publ ic policy lb .
1 ll lOll. a Cit \\'It l
differences in degree and nature. Both arc linked to changes in the external environ-
ment. the growing economic integration of the European Union and the emergence of
Mcrcosur, as well as the gr0\\1h of global fim1s. 1 he} arc by no means the only examples
of such trends.
The geographi cal reorganisation or 're!)caling' of the state in pursuit of effective local
and regional governance can in some instances in\ oh c the transgression of national
frontiers. A good example of this type of dc\ elopmcnt is the crcatton of the cross-border
0rcsund region whi ch links the region of Skane in Sweden and / ealand in
Denmark (see Maskell and Tomq\ bt 1999: Berg et a/. 2000: OECD 2003b). Of
symbolic and practical significance in the constructi on of thts border region was
the opening of a bridge, which crosses the 0resund strait. funded by the Danish and
Swedish governments, in order to link rvtalmo and Copenhagen (Figure 4.5).
The region is governed by the 0resund Committee - a gathering of political
sentativcs from the local and regional authorities on both sides of the Orcsund. The
'
Committee is a classic exatnple of 'go\ernance wtthout go\'cmment :
d
1 1 tical bodies from both
The con1n1ittee is composed of local an regtona po
1

. . t. 1 for transnational
sides of the sound and wh1ch ts qu1tc cxccp 10na . .
. . . Tl . s of integratiOn tn 0resund
ali sm by the two national . . . 1e proces
1
,
f
, dditional oo\ emment aycr
is therefore achi eved not through the set up o an a a
f 1icies of its
but through the voluntary coordmatton po (OECD 2003b: 160)
h
. d the r\!Jon of Skane.
<1 al aut onty an e
The key insti tuti ons are the Copenhagen reo
10
n .
1
. n \\oithin Sweden.
. b f ex pen menta regiO .
wh1ch was created in 1999 as one of a num er
0
. the field of ccononuc
. h t 1 crovcmmcnt tn
wh1ch took o\er responsibilities from t e cen ra o
development. . t
1
the stnmg economic
b
d r regiOn came ron ... . I
The political impetus to create the cross- or c ...
1
as pharmaccutKa s .
. . d Sk ne in sUl: 1 ' . . . , 1
complementanties between Zealand an a nications
11
. . IT nd tclecommu .. . .
biotechnology and medical eqUipment and a. . collaboratlofl
10
. . . tensed b)
practical terms, the 0rcsund reg10n ts charac

-
, .
- :JI
140
- .
I
OF UNDERSTANDING
D
..... -...
- - ' ,
f... a 1 1 c g cl I

I
I
'
'
E
'
'
-
'
'
'
'
'
-
'
'
' \
'
'
'
\I A
I
I
I
\
'
-
-,
'
,
,
'
I
' I
- 4
'
,
,
I
I
,
,
,
i
, --- ,
/ Kobcnhn' n
' ' ............
- ,
--
Ro,lnlde
R 1\:
-- -I
I
"
\
\
I
/
' I
p
\ 50
,
,
J
Copenhagen
I t'l
.r.
-...
I
I
I
, 1\ ruullnb
'
,' l an:.
II a II. n d s 1 11 n
'
' I
I
I
'
'---- ....
'
__ ,
,
,
,
I
'
-- -' ' .
' . , .. -.....
S \ \' E 0 E N
\
-
I
'
'
' \
'
'
I
'
-
,

--
I
,
I
I ---
-
-,
I,
,
'
'
;
'
,
'
i
'
---
,
Balti c Sea
0 kilometres
Figure 4.5 The Bresund rea/on D
b ' ' enmark and Sweden
and education and the dcv . . . . . .
key mdustrics Th . clopmcnt of nctworkmg assoctatlons tn the regtOn
-.. . us. m order to su h . h'
n.: g10n cooperate th h pport t e growth of these um , erstttes tnt '
. . . . roug the 0resund U . . . . . . - o
mstttuttons of hi l d . nt\ ers1ty -- a network tn\oh mg all the
g ler e ucat1on in th f
the 0resund region a l'k
1
e reg
1
on. The econon1ic effects of the crcattOn
I
. re 1 e y to b 1 b
IShcd an idcntitv for t . If c . ong-tem1 ones. but the new region qut ckl)
b
. - 1 se . the stra
1
t . . . b ,.,er
ut a means of com .. . separatmg the two reo tons ts no longer a ar
mumcat1on and . . o . ha
mtegratton. Moreover. there is C\ idence that tt
I NSTITUTIONS

GOVCRNMEN
=-c... T AND GOVERNANCE
Plate 4.2 Transnational infrastructure connections the B d S .
and Sweden resun between Denmark
Source: 0resundsbro Konsort1et
stimul ated new in\ estment in the key hi-tech sectors in the region and that there has
been a modest gro"vth in cross-border commuting (OECD 2003b).
exmnples of the de\ elopment of nC\\ forms of governance in diverse political
condtttOns detnonstrate the apparently wide appeal of decentralised solutions to the chal-
lenge of local and regional de' e1opment. The different examples of Emilia Romagna.
the ABC region and 0resund each demonstrate, to varying {;Vidence of the
shift from govcrnrnent to governance. ln the latter case, the emergent network forms of
governance extend across national borders. Determining tht! actual impact of the new
regional governance is fraught '' ith difficult} because it require> us to isolate the effects
of one actor or set of actors among others. \ 1oreover. as '' c noted carltcr. while there
is some e,idcncc that de' ha> been accompanied by a gro\\1h of regional
inequality. there can be little doubt about the general trend towards decentralisation. The
regional scale has emerged as an important one in the govemance oflocal and regional
development. .
Th
.,. h , rcr has not been untver-
c growth of the region as a sphere of govcmanct.:.
0
" C\
II
....., d
1
little more than an
sa Y applauded. Some \\rritcrs sec the trend towards cvo uuon . .
1 eoional l] ll"
Instrument of nco-liberali sm. Lo\ering argue that nc\\ r ::; d h
b d' 'b rive an 0 aO\\
e seen as part of a proiect to di smantle natwnal rc tstn u i\l J . (L veri no !999: 392 ). l organ.
out the democratic content of cconom1c go,crnance
0
. :;:.. . 1 n
h . . . t , H:\\' of rcgtona t.t
1
owever, cautions against a 'functiOnalist and rcclucttonts
. --
: 141

- -
1.42

FRAMEWORKS OF UNDERSTANDING __ _
J
...
1
,tl sculc.:s l'f activity, thl'n, arc Ht\.'tHl!'\ ul lunflict .
..., . S74) The local I \,;gull ' . . cHid
_004. '"
1
. l tl ,.. and fl'lllallh charact . .
. h the \\''I\' t lei lt: "' l:
m nlll<.; . ': ...
1
lrcovcr. Jolal and n.:giomd lcvl:b remain an import
b , llitu:-. Uld nct!otwtwn. l l . _, . ant
) P' ' . .... , . , 't'
1
, e
111
clusivc and sustamabk torm!' ot pol icy the
rrlin t()r udwn to crlak pt 01!1 . .
k ' . t . .
1
cJu-.wns
1
n Chapk'I K ,tnd n:gtotwl go\ ct nmcnts h
which \H' takt: up Ill t H.: u>r . . . ave
d
a... n ..
1
, Ill thc dl'H'hlptncnt ot Ill.'\\ ftclds of publte polic)' F
prove to l't pto , , ... . . or
1 f
. , nl go\ cnuncnb }l<l\ t ' bt:\,;n ,tt tht: tor\,; tront of the \l'arch ('
msttncl.' loca am rcgwt' 'or
' bl t' . , f JtK'tl tnd regi onal dL'\ clopmcnt ( L '\atnpk -l.2).
morl' \ U"italntl c
1
'
Example 4.2
The constitutional duty to promote
sustainable development in Wales
The '\at ional for \Vale a" part of the de\ elution and constitu-
tion.tl rLfonn
111
Kingdom during the late 1990s. t\ midst hopes of political
an opportunity be n tak n to embed sustainable de\ cloptncnt in the very
of this new poJiticaJ in titution. I this initiati ve became man1fcst in the
..
ohligation lll promote de\ dopmcnt imposed on the Assembly through Section
121 of tht Go\crmncnt of Act in I 998. This constitutional duty was a first in the
Europl.'an conkxt. An aspirational strategy - Learning to Live /Jif./' erently was published
in 2000. ailll has been w approach the economi c. social and environmental dimen-
of su ...tainablc local and regi onal c.kvdopmcnt in a more integrated way. Early initia-
upon health. public and sustainable agricul ture. Jor example.
the A" cmbly Government (\VA<I) - the cxccuti\ c - has been
attempting to !:>hift the bast" of the National llealt h Sef\icc in Wales towards health and
wdl -bci ng mthcr than and treat ment. and to encourage a shared responsibility
bl't wtcn the that make up the public realm and indi' idua ls:
hccausc it recngnises that sol uti on to problems like childhood obesity, for
cxamplc, has less to dn with the health scn ice per sc and more to do with
pro\ ic.ling nutritious school mcab and to schooL thereby helping chil-
to acquire healthy eating habits and encouragi ng thetn to walk in car-free
cnvtronrncnt s.
(Morgan 2004: 8H4-885)
\Vhilc laudablu. this con t' .
1
. , . . . . . .
, . . . s u tona mnov,1t10n for a subnat10nal pohttcal mstJtutJon has
r.usec.l questiOns over wheth.. th
. .. . cr e reg tonal scale of government has the cornpctcncc. cspe-
{ wil y tn legal terms to prom .
b . ote and deltvcr on the potentially radical changes suggested
Y more sustamahle fonns of to .. 1 d ,. I
r . . . . l:a an regaonal dcvclopn1cnt. European and natt onal Icvc
po ,md rcgulattons provid b h t . . . . , .
f . . e
01
t 1e barners and opportumttes to frame the ddtvery
o more sustamablc forn1s of de 1 G
t
1
. . ve opment at the local and regional scales. For the Vv A J,
b rc attvely modest powers ma .... d . . . . . ,
E ... . Y nee to be deployed m tandem w1th mstttutwns at the
uropcan and national scale witt . .
un a multtlaycred system of governnlcnt and governance.
Sources: National Assen1bly for Wales (2000): Morgan (20
4
)
N S TIT U T 1 0 N S:
GOVERNMENT AND
, GOVERNANCE
c ) Ill.: danger of the Jcbatc about novel fo
. nns of locll , d .
. . that they detract attcnttOn from the en
1
. ' an reg tonal govern
. . . t unng role of
1
. ancc. though
,
0
, crnments tn the frammg of public policy Itt. . lle natton state and . '
g . , 1as been . .., . . national
)Jl the nc\\ rcgtonaltsm that the combined , an assumptton of some ..
l . conlic4ucncc f l . . wntmg
(

10
n ha\ c rendered the nation \tate redundant (()h
0
g obahsation and (lc
1
, . mae 1990) , --. . vo u-
not borne out tn rc,llt ty. Dcsptte processes of
1
b . 't ct such an assumpt'
g o a!Jsation . , . . ton
trust. there arc to bel icvc that , , prl\ attsatton and dec! in in
. . go\ crnmcnts ret . . g
shaping and cconomtc structures. am an tmportant role in
Gl obali sation creates new challenges which ..
. . l:annot be dealt wi h .
states actt ng al one. Accordtng to Held e1 a/. ( 1
999
) . . t by smgle nation
4
, nattonal eomm f
form an clement of overlapping communities of fat ,
1
unltlcs o fate' now
. . . . e , w 1ere the
1
f .
are incrcasmgly tntertwmed wtth one another. This d :> c so nat10ns
ocs not mean that states d
governments arc tnclevant but, instead. remain powcrfi
1
t .f . .an natiOnal
. . f . . u s ratt ymg forces 111 the \ r ld
cspcctally m tcm1s o managmg the d1stribut1vc eonscq f . . '
. . . . uences o globahsatton
The act1 vtttcs of go' ernments, mantfest in different welf: .
. . are state regtmes, continue
to ha' c a central tmpact on economtc growth on inequalit 'tl .
. . . . '. Y WI 1m natton states and
between natt on states. Thus, natiOnal poltt1cs sttll count and hold tl
. . . 1e potenttal to make
a dtftercncc, as docs effecttve state management and intellioent lead h' N
. . . . c ers tp. attonal,
reg10nal soc tal partnerships. sttll play an important role in limiting inequality.
cmpowcnng cttJzcns through educatiOn and learning and improving <:ompetitiveness
(6 Riain 2004). We return to these pol itical question5 in the conclusions in Chapter 8.
At the same ti1nc, the role of international regulatory bodies has grown in importance
along with questions about the accountability. transparency and efficacy of their activ-
ities (Stigl it; 2002 ). Such bodi es ha\ e been central to constructing the liberalised global
economy resting on the assumption that this brings general benefits to all economics.
But, as we di scussed in Chapter 1. the impact of globah')ation has been highly uneven
for di ffcrcnt social groups and countrie5. There is e' tdcnce that liberalisation can be
generally good for the \Vorld's poorest but that raptdl] liberalising capital
tlows can damage economic prosperity. increase mequality and limn the life chances of
the poor. In this context, new regulatory policies at the internationalle\el are important.
but so also are the acti vities of states to intervene to promote local and regional de\ cl-
opmcnt and build their capacity to manage their national economies. imcst in
. . .
1
t their approach to foretgn
structure, tmprovc human cap1tal and pract1sc sc cct1v1 Y m
d
. . .
1
the subicct of Part Ill of
trcct tn\cstment. I ntcrventions, mstruments and po tcJes arc J
this book.
Multilevel governance and local and regional development
. , . . . e context of a mult ilc\ el polity in
Local and rcgtonal dcvelopn1ent now occut s \\ Jtlun th . . d . all plav a
h
. h I aut hont1cs an ms
1
w IC local regional national and supranauona d. to one anal)!:-1!:-.
role (see and 200 l ; Bache and I lindcrs
2004
) '\ccor mg
. . . . b th more efficient
h
. ts
0
t e dtspersion of governance across JUi t
1
They claim that
h
t 1 state monopo Y
t an, and nonnatively supenor to, ccn ra

'
.
144 '
FRAMEWORKS OF L f\J DERSTANDING
, .. , .
1
multtpll.: m order to e,tpturc.. ' <II ia tions
111 11
.
rovcrnancc must l)PLJ ,ltl: ,t "' , , . I . . . k
g .
1
. .,
1
nrtlttte-.. Bccnu-.c lttc -. ttt I rom tt ,
tcnitl)rinl rc,tch of po t<..) c. t: ' - lt:
. I I ' tn tmtncn-.l.'l\ from pl,mc..t \\ Hk II\ the c l-. f
ro' ,...,;on of pub tc golll , . . * , , "' o
r f I "ll tn the Ccl.:-t' of (It! -.et \ tee-. -...o '-l hould the sc 11'
!!lobal \\arrnmg o (lL , . . , . , . , t:
-
1
t'nl'lliiL' L''-lt'rnalrttcs. gO\t:tl1cHKt: must b t: mult rlc\ cl
0 f gO\ 'Crr1Hill' L' . () Ill c. ' .
.. nnd llooghc 2004:
1
(>)
.
1
.. d .
1
...
1
,. lllentllrc.. ,tddrcssin!! the emergence of mu ltilc, cl go,
I here ts a argc a<.:cl t " " ' . ... . . . . nee,
t
. . . . rrlc..'d \\'ith ih c\ olutwn Ill contc't ot the t\\ Ill polttrcal proccsss .
much o tt c:onc:c . . . . .. . of
. ..
11
>n tnJ Jc\ <>Iutton to subnatwnaJ notabl y tn fi elds SLI .
l-:. uropean mrcgt J < ' . c 'l as
.
1 1
(B"t'z and Burkhard 1999). The emergence of multlle\ el governt .
po IC) " . , . r <.: c 1
in some to the <kdimng authont:y ot the state and ts ' mani fested .n a
unm
1
ng of c:\ch.mgc-. bet\\ and transnational institutions \Cern-
b;rpa. , 111g the ... utc' and \\htch a character and which
reputed I) otlcr nC\\ opponmut for ctttcs and regiOns (Peters and Pi erre
2001
:
131 131). 1t 1 . a dopmcm \\ htch has been linked to the emergence of ' ne\\ Plnlic
management'. "h1ch aliO\\, 'each lc' cl of goven1ment to separate the politicai -
Jcmocrat1c element from the managerial- en icc-producing-sector of government. and
part!) because thc'e rdonn ha\ e tended to relax the Hcomn1and and control nature'' of
pre\ iou intergovernmental (Peters and Pierre 2001: J 32). The complex
nature of the emergent hicrarclucs of relations between institution5 working at dtf"ercnt
calc m Figure Such developments raise new chal1enges and questions
G lobaJ level
WORLD
REGIME
MUlti
nat1on t.1ERCOSUR
blocs
Sovereign
states
Regons
ASEAN APEC
MAlAYSIA JAPAN
MEXICO
uuuooooooooo ........,,...._,
NAFTA EU
USA CANADA
Figure 4.6 Fragment of an e
Source: scott (
1998
:
138
) merging global hierarchy of economic and political relations
,
INSTITUTIONS:
GOVERNME I
NT AND GOV
r ,,l>\ l!rnmcntal although these , . b - E
(l r ttry etwc .
the 1 uropcan Unwn (Scharpf 199 1 ). en countries and sect .
. ors even \\ ith.
At the supranational level. the rcgL I In
, . . I atory framew k . .
h' tJJCd by organ1sat10ns such as the Wl 0 . co . . or of tntcrnatio
1
.
.., ' . ot Jo ( 1 he 'G. . na trade IS
including Canada, France, Gennany. Ltaly J- Houp of Eight' wealth .
h
. apan. Russ1a th, U . Y nattons
United States). At t e same t1me. the Luropea U . . c ntted Kingdom ,
1
. , . . . n tllon dtrectl , . anu the
I
JOitcy and plays a role 111 regulattng the regio
1
Y operates n
5
own .
na and other polr . . . regional
(Am in and I omaney 1995a; Rodriguc; -Pose
20
()
2
b ctcs of tts Member Stat
I
). However cs
continue to p ay an tmporiant rol e notably in ar ,. . . natrona! government
. . cas such as taxatt . s
and labour mat kct regulatton. ln these the , . on, publtc expenditure
. act tons of central ,
the prospects for local and regtonal de\ clopme t A . go,crnmcnt can shape
. n dtscussed ab , .
and publ1c expenditure system has the potent ial t'll O\e. the nat1onal tax
. . . s t to act as .
financial rcdt stnbutton between ri cher and poore. . an Important means of
t <)orne fed I
Germany, Canada and Australia operate with e"pl ' . era such as
" 1c1t systems of fi
1
. .
which transfer resources between and
1
. . sea cqualtsat10n.
. aggmg rcgtons (0 , s
McLean 2004). Indeed. tn states whi ch Jack , . mnh 1994:
. systems of regiOnal cxpe d't
allocation, such as m the United Kingdom, publ ic expcnd't . n
1
urc
J urc patterns contmue to have
Important regtonal effects and generate about h. .
2005). , geograp teal equtty (McLean
In thi s context, the ' new regional go\ crnancc' 1
P ays a pantcular economic role in
orchestrating the suppl y-side of the economy:
an industrial policy oriented towards structural changes in the economy and the
promotion of producers' adaptability to the condi tions of domestic and inter-
national competition must focus on meso-IC\'el structures m the oiven economv
e .
and its socjal environment. Therefore, the creation of intermediate level struc-
tures that would facilitate economic restructuring is the top priority of indu5-
trial policy and the goal of the economic strategy.
(llausncr 1995: 265: sec also Tomane)' 1996)
These intcrYenti ons become especial! y important in places "'here, or time periods "hen.
competitive success is not a simple function of low-cost and flexible labour, but instead
requires constant upgrading of the production system. Thus:
Where institutional guidance of market affects the level and char-
acter of the employment that is generated. full employment requirc.s more
fl 'bl k t ndeed 1t ma) cntt-
JUSt aggregate demand management plus ex1 e mar e s.
1
II d
c t nc , a fine-taroetcd
ca Y depend on the state bejng able to con uct. .or 1ns a c ::1
. . . F h th,. of pub he
acttvc labour market poJicy of industnal poll C) . or t
15
c
d
. . . d , to the networks that
a mamstration must be such that 11 can reach O\\ n tn h
h ffcctivc usc. t e
mcdaatc exchanges in civil society, puttrng t esc to e . f
. . dcs1gn or refom1 o
state as not well-equipped for this purpose. the conscious . .fi . for
critical sloOJ lcancc
appropriate state, or para state, institutions may assume b
employment. d St. "ck I99 1: 8)
( M atzncr an
1
ct.:

.
'145
-
'
146
UNDERSTANDING
FRAMEWORKS OF
Example 4.3
The limits of and regional
entrepreneuriahsm
.d thnc\ out the danger:-- of loc,ll cntrcph.'ncurialism
In a D,t, I . .
. t dc,igncd to mak.c particular (itics rnorl
\lam of the mntn atiOll" .HH . . .

1
. mT centre hJ\ c qutckl) been tl1lltdtcd cbcwhcrc
attracti' c ;b cnltunt <.:Ort"u ... . . , . .
' . . 'tttn , ad\ .mt,lgc \\ tthm a S) stem o1 Cities ephemeral.
thus rcndcnng <tO)' l ompt: . . . , , , .
. . f
1
on' cntwn centres, sport st,ldrcl, dtsnc) -\\ orlds. harbour
Hem man) ut' L..,.., u <. , "" , ,
, .
1
. hoppmu mall" can tht.:rc be. ucccss ts often shon-hved
P
lace:> and ... pet: tell ll ell ' ::::- . . . . .
d t b P
lrJikl or aftcrnatn c mno' at10ns ansmg elsewhere. Local
or rcmkrc mOl) <
. . h , )ptlon oi, '-'n the cocrcl\ c law5 of compettttOn, except to 1-.ecp
coaJJtlOn:> no c :::: . . . . . .
d t
. h, nlc 1 11u .. nocndt.nng kap-troggmg mno' at10ns tn It fe St)'tes
ahca 0 t t: r _, .. ...
I I t
. .. prodt1ct and C\ en mstJtuttonal and poltttcal forms
cu tura onn. .
if the' to -.un nc. The rc. uh h a -.timulating if often destructive maelstrom
of urban-ba cuitur.tl. pl>ltttcal. production and in no\ ations. It is
at this point \\ c can idcntif) Jibe it "ubtcrrancan but nonet heless \ ital connection
bcm een the rise of urban cntrcprcncurialism and the post-modern penchant
for of urban fragment rather than comprehcnsiYe urban planning. for
ephemerality and eclcctici m of fashion and style rather than the search for
enduring Yal ucs. for quotation and f1ction rather than invention and function,
and. finally. for medium O\ er me sage and image over substance.
Source: Jl arvey ( 1989a: 12 13)
The strengt hening of local and reg10nal governance can thus add to the capacity of publ ic
to make effccti\ e in ten entions to promote economic devclopn1cnt. Local and
regional go\ emance then pi a) an important role especiall y in ensur ing improvements
in the quality of the suppl y-side of the economy. But without national or increasingly
.. upranati onal forms of regul ation there is a danger that the ' new regional ism' may accel-
erat e wasteful forms of territorial competition between places seeking to promote their
own dc,elopmcnt at the expense of other places. Indeed, one danger of the general trend
towards deYolution is that it can create weak subnational <10vemments that can do little
0
engage in local or regional entrepreneurial ism that fuels territorial compe-
10
_a context where TNCs. ostensibly at least. can mo\ c investments easily between
rcgtons m search of the best returns (Example 4.3 ).
Democracy and local and regional development
The emergent fom1s of g) 1 ment
. t vcrnment and governance of local and regional de\ e op
drc also tn pan a rcspons .. t . d (! nns
c
0
more broadly perceived deficiencies in centralise 0

T U T 1 0 N S.
. G 0 VERN M ENT
- AND GOVERNANCE
t
, )v0 rnnH.!111 and governance bt.hcd on the . . ---
,, gl . n<ttlon state p
I I 0 11 is that tt appears to bnng go\ernmcnt .
1
art of the attraction of ,
1
u 1 c O\cr to the uevo-
\ to ltlf1ucncc and the pnorit ic' t
1
people and open spac" "
Ill!\ ' so ocal and . \:S or
( llutllphrc: ) and Shaw 0, Brien ct a/ 2004 ()' . regional development polic ,
004 Th. . . Bncn 2004 p k , . )
.,00.-t; Roger-, 2 ). ts seems tmpot1ant at a t , 1 c and lomane ,
- tmc when public f . I . )
f nuti onal governments seems to be dcdtning .
11
..
1
. . att 1 tn the capacities
o 1c tnHtauo
11
, f d ..
cprcsentativc democracy arc all eged to be reflected . f'
1
.
0
tra tttonal modcb of
t f . Ill a ltng \ oter t .
, ,d declining levels o trust tn poli ticians and pol't".
1
. . . umout tn elections
at t tea tnstttutton<; (Ph
2ooo: Cohen and Rogers 2003; l ung and Wright
2003
)
1
. nrr and Putnam
.d h. k. f . n thts context d 1 .
linked to a WI er ret m tng o democracy, which ':ieek. , e\o ut10n is
. s to augment or mo . b
limits of representative democracy and in the directi r .. \e ejond the
on o more parttctpato f
go\ernment (Held 1 993). In this respect devohcd go,, I) orms of
crnment can be
t' f b.,. as a
in whtch new on11s o accounta 1 tty and e'en a 'new p r . . . c
I 0 0
.
0
Htcs mtght be tested (c ,
\t01oan and \t1 ung 1am 2 0 Humphrey and Shaw '004)
1
. fl . .g.
. o . . . ' - . n an tn uenttal peroration
on contemporary poltttcs, Gtddens has argued:
The nward pressure of globalization introduces not onlv the b"l b
J posst t ttv ut
also the necessity of forms of democraC) other thm the ort1
1
od
. . ' ox votmg
process. Goven1ment can re-establtsh more dtrect contact with citJ
1
ens and citi-
zens with government through ' experiments with democracy' - local direct
democracy, electronic referenda, citi.wns' juries and other possibilities. These
won' t substitute for the normal voting mechanism in local and central govern-
ment. but could be an enduring complement to them.
(Giddens 1998: 75)
The shift from goven1ment to governance implies the influence of ne\\ actors over poltcy
decisions as networks are extended to include ne\\ representations. Go' emance reqUJrcs
inputs from a wide range of actors, including non-go\ emmental in an
attempt to achi eve poli cy goals. Social partner<; hips. imoh ing statutory organisattons
and voluntary and communi ty sectors. represcntatt\ es and acti' c citi Lens. arc central to
this concept of governance and have helped to set social and economic priorities (\ 1cCall
and \Villiamson 200 I). . . .
The nature of contemporary poli tics, however, presents structural diffi cultt es
10
the
achievement of sustainable local and regional development. Most efforts to prom?te
'C th long tenn, ma) be takmg
local and rcgtonal governance arc ll kely to be eflcctnc O\ cr e .
. . .
1
h hortcr-tcm1 character. typt-
a generation to have an effect. Yet polttJcal cyc cs aH! a:> , I
. . bl to create p1anmng me(; l -
cally four or fhc years. One means of tackl tng thts pro em IS ...
. . I I tical <:) cle. Thc crcattOn
antsms which stand outside - at least dtrectly the norma po
1
.
1
,. _
. . I . n Jong-tenn economtc stra t.:
of soc1al partnership arrancrements charged w1th de' e opt g d. . Chapter
. . o . . d. s in the case stu Jes tn
g1es 1s a feature of some nations and reg1ons. As \\ e
1
d b ome commen-
7 h ' redttcd 111 fre an )
5
't e role of national partnership arrangements IS c . r ,.. . phenomenon of
t . , f the Cclttc tgt:r
ators wtth an important role m the emergen(;c
0
such uo\ crnancr
. . ll 2004) Howc\'cr.
sustamed high growth in the J 990s (0 Donne ." . further from direct
. . . .. . o k C\ en
an-angemcnts can also be cntictsed for cy d d lo problem h)
d 1 c rcspon c
emocratic control. Whi le the Jrish authontlcs
13
'
-
148 ' - '
O
F UNDERSTANDING
l
t)
1
,, tdcr of en tc .tctor,, the r,
I
uon 11 11p l '"" '" t:lllattl\
t: \tt: mJmg t l t' n.l '. .
1
,, ll)pmcnt mt l' tc<.: htH)<.: rat tc net\\ ,
1

,
1111
ncc o f c:conornt c.: l c.: ' l tl' h
that the
0
' t: ' bl , t th, c ttt/ cn. 1 qucstwns .lb{' llt the , .tlu ,
, ,
1
pwrc 1mpendm c.:
0
t . . ,Jnd
.trc t\ t:t ,
1
,.
1
'f htp tr,Hiittonalh pro\ tdL d b\ pohttt: 141l b t1nd pol ,
. . t. the dt: rnl' CI111Jc.: t.: cl l t . lllc.tl
tunctron o
(OJ son . ... d , , , I . , . I .
pa '>OOO 111) t.: cmocrclc) 1,\s .1 " d) s had a , I k
>\ Robert Dahl (.. - . . . . tar
. . _ , . , ddt' \' tttng (lt scrdtOTUU) authont) O\ cr dcctstons of C\ t
, 'd, ,, htch 111, oh c ltl / \,;11' - . . . . . ra-
st c .
1 11
al tnd bureaucratiC chtcs. The mshtuttons of represent
ordtnnn Importance to po t c.: ' . . a-
. h ltJmcnts Clnd rcgwnal and local assemblies. have traditiotnll
tn e democnK). sue p,tr < .... ' y
. ,
1 1
, btruurHn!! ,1 ... the marn motor of polttr cs. HO\-\ CVcr, dc\el opment
placed ltmtb on c.: 1 \.: -- . ,
h
. , bit . rnmu!cmc:nt' anJ multdc' cl go\ emancc may mean that more
uch as t e nt:\\ pu t: ' '.... . .
.
1
, r ,
111
,
1
, cd from the pun tC\\ of democratically accountabk t:pre
pollttca pov. er ts c.: '" . . .... . , , -
. C h ( ..,004) ooc..; so tar as to tdenttfy tht.: emet gcncc of an era or oost
sentatn c . roU<.: - -
. the tndll tnal in '' hich stntctures of formal dcmocrac\ rema
1
n
democrac\ tn
in place the growing role of the pn' ate sector in the pro\ i.sion go\ crnment sen tees
means that importJnt poltucal dcctsion mo\ c beyond the dtrcct mflucncc of the citllcn
(see al so Ringen 2004). \\ e return to these impot1ant themes in the conclus ons in
Chapter 8.
\\ ithour strong democratic leadership. an additional danger is that debate about social,
-
economic and em ironmental are increasingly shaped by the gro\\ th of
po\\'crful nC\\S media. Indeed. according to Mayer we can observe the emer-
gence of a media democrac) in "hich the media politics' and politicians
collude in the Bet\\ een them politicians and the media are then reduced to
adopting a narrow range of'' formulas in constntcting their responses to polic)
challenges. Political debate becomes fixed in a closed world of media-sa\'vy political
ehtes. pollsters and medta e\ccuti' e dri\ en by the exigencies of twenty-four-hour news
gathering. The traditional fonns of democrat ic deliberation such as political parties, busi-
ne sa. sociations and trade union and. indeed, parliaments find themsel ves increasmgl)
marginalised in the political proces5 (sec also Crouch 2004 ). Moreover, the media have
been accu ed of not reporting debate and dissent. but 'manufacturing' it in cahoots with
or single-i ssue campaigns (.\thine 2005). Democratic deliberation, then, is a
casualty of media democracv .

\layer is one of many who argue that democratic societies need urgent I} to find new
mean of deliberation that generate long-term and sustainable soluti ons to problems of
in ways which enhance democracy (see also Crouch 2004). Fung and
\\ nght maintain that the traditional fonn of representath e democracy:
seems ineffecti\e in accomplishing the central ideals of democratic politics:
facilitating active political irn of the citizenry. forging political
consensus through dialogue, dc,ising and implcrncnting public policies that
grou.nd .a productive economy and a healthy society, and, in a more radical
egahtanan \ersion ofth d d b fit c.rorn
e emocrattc 1 eal. assunng that all C1t11ens ene
11
the nation's wealth.
(Fung and Wright 2003: 3)
I
=-- GOVERNME N
. . T AND GOVERNANCE
, , . I)
11
c.: of thtnkmg has generated \Ome expc , .
r ht.... . . runcnts II) What F
. tbc.: a..., cmpO\\ crcd partt ctpatory go\ ern an . , Th ung and Wright PO()) )
dcst:r cc esc ex , -
l
'C'lttsC thc.:y rely upon the commitment and clpart: . pcnmcms 'are participator"
n; c " "' ICS of d. ;
, iblc dccl::,tons through reasoned deliberatton d ... or mary people to make
. . an empowered b
to tic ac ti on to dt scusston (Fung and \Vright
2003
: S). they attempt
J\tnong the well-known examples of these ne\\ . . .
. . otms of go, ern . .
t
or)' budgctmg system that was ptonecrcd in Port AI . . ance ts the partu.:i-
pa .
0
egrc. a ctt , f 1 .
the capital of the state of R10 Grande do Sui in Bra;ll . .
1
h... )
0
mtllt on and
t
l c \Vorkcrs' Party after it gained political control of th . . c .sy')tem mtroduced by
1 . c cnymthei990s s
lo
cal asscmbhcs meet twt ce a year to settle budgetan . . . T orne St\tecn
. '"' . ; Issues. he asscmblte I
municipal officials, commumty and youth 'tnd an , . t s tnvo vc
. . , ) m crested cttuen The munic
pal government factlttates the process. but it involves num . -
I . . . . crous netghbourhood meet
ing which the pnontres for the city budget. A Partie t f: . -
. . . tpa ory 3udgcttno Council
P
rocesses thts mformat1on and formul ates a city-wide budget f h e
. . . . . rom t e local agendas
The role of muntctpal offictals 1s to mform and asst\ l m the proce b . .
. . . SS Ut CitiZens and
local oroups dctermtne the budget whtch ts then subm1tted to the ma)'O th .
e . . . r or etr approval
(Fung and Wnght 2003 ). The success of partt ctpatOl) budgeting has seen its introduction
in other parts of BraLi I such as Santo Andre in the ABC regi on (Acioly 200
2
).
In India, sirnil ar decentralisation initi ati ves thts time to villages in rural areas (or
panchayats) arc the hallmarks of states such as West Bengal and Kerala, \\ ith popu-
lations of 80 milli on and 32 million respccti\ Cl). Here. responsibility for many dc,cl-
opment progrmnmcs and their budgets ha\ e been deccntralised to village asscmbltcs. In
Kerala, this process is assisted by a ' Voluntary 1 cchnical Corps' comprismg mainly
retired professionals \Vho assist in the preparation of development plans. In both Brazil
and India, such participatory fonns of local go\ cmancc have not been problem free.
Some communiti es prove more adept at adapting to participatory governance than others
and there arc unresolved tensions bet\vcen the power of technocracies and citizens.
they represent radi cal innovati ons that have assisted the de' elopmcnt of
at least some localities, by ensuring that local poli cies are more genui nely encompassing
of local and regional needs and aspirations. .
Efforts to develop deliberative local instituti ons are not restricted to de\ elopmg or
newly industriali sinrr countries. In the United States, the Center on Wisconsi n Strategy
. o . . p h. (WRTP) provtde
(COWS) and the linked Wi sconstn Rcgtonal Trammg artners tp .
. .
2002
) CO\\ s is a
an example of deliberati ve policy-makmg (V1gor . .
. . . h J d ocates the ' htgh road
tank based at the Uni, ersity of Wtsconsm-Madtson, " IC
1
a ' . .
. . ' t , chtc\'C producttvtty tmprovc-
economJc strategy we discussed m Chapter 2. It sce"'s
0
a . .
. . . d d quahty production
mcnts m industry throuoh workplace democrattsatton an
1
.
o . . . Tl state. s development pnon-
rather than competition based on low skilb and pncc.
1
e. . d the state
. I tntons busmess an
hes are based on a strategy developed by researc l . nusual
. .. , uni ons and busmess IS u
government. Such cooperative behavtour bet\\ een state. .
1
ptrt the initi a-
. h t d much attentton. n c
In t e US context and COWS as a result has attrac e .. R blican omcrnor
f , 1 f\Vi sconsm s epu
tve emerged as a response to the 'workfare agcn( a
0
b , h trade uni ons as
T h. l as \IC\\ cd ) t c
ommy G. Thompson during the 1990s, w tc
1
w
eroding the position of working people.
-
i
'
O
F UNDERSTANDING
FRAME\\ORKS
. . t W\ democran t:-- h) a '-L't of . .
. , htnct:d patlt<.tp.t ( . "' Pttnc1
The model ot t:ll
1
..
1
, thtt' on communtcatl\ t: form, nr trtl<
)thcr thtll!!" P ,tee.: ' ' . ' lll and
that. amon:::- <. nwtPC!llL'llt thwugh tht: ttl\ oh t:mt:nt of , ,
. . ntnncuu! <.I\ t<. c.: .tsso.
ddtbcnHton. on c.: c ...
1
. llf
1
of dcmocrilC) 111 \\ , \) -; '' ht ch lll " k .
. . I dt, dl)ptllt'll ,rr ' . ... . " e It
Clclt10ll!) Ill po t' rn'- t>f n lt"tiCipator\ !..!,0\ L'fllClnCC C'\htblt a \ trong .
. ltOI'\ fht: nc" Ol t' . "' '"" Ptac.
more partH:IP mph
1
"'" <.)l1 ucmunch bottom-up l>f
1 . . tation tnd ,111 c.; ( e . . . tl ton
ttcal oncn < '. t. J,.
1011
.nwl-.11!.!. 10 pclrttctpants ltstcn to each otl , .
d --rb 'mti\ c torms ll u.:t:
1
" .. . . . . ler s
and c.;
1
c.: , , h ltcc-. atlL'r due cons1deratton (rung and \\' nght
2001
)
'tJOns and l!.t:m.:mtt l l . . . ) .
post . ': . f d, 't"ion-ma!..ing is challengmg. parttcularly m long-establish d
\chic\ inu th1s tor m o n .. . . c
:::- , , t lnd l!.O\ \ to reo' cr, much of the ex pen mentat ion \\ th
of c.: mmc.: n ... . I
s. - ."" t. rtlclp non Uln crnmcnt appear'-' to be taktng place at the local
the c nt:\\ torm:::- o pct ' '" . or
.
1 1
l r. que t
1
on-. ,1bout the qualtt) of de' clopmcnt seem pressing.
rcgwnal C\ c . \\ ,le t:
Conclusion
Rumour of the death of go' cmment ha\ e been grossly exaggerated, not\\ ithstanding
clatms about go' cming w1thout go' crnrnent'. The role of go\ emments, especially at
the national lc\el. 111 haping patterns of local and regional development rcma1n!' \CI)
Important. particularly in relation to decisions about taxing, spending and redi str"bution.
Example 4.4 pro\ ide some reflections on importance of government from the United
Kingdom s recent C\pcnence. The intemationalisation of the economy, hollowing out
and ne\\ regionalbm placc5 constraints on governments and shapes what the\ can
achieYe and most nat ional go\'emments must work alongside supranational and sub-
natlonal go\ crnmenb in . ) of multile\ el governance, but this not mean that
go,emment no longer matter<:>. Ltke\\ tse, partnerships ha\e become more important as
a mode of go,emance. but the nature of these partnerships is shaped in large mt.asure
b) choices made b} go\ emments. Partnerships can range frotn little more than political
CO\ Cr for of pri,atisat ion to genui ne efforts to empower communities and
citi;ens.
Government is about politi cal choices. Although there are limits to the choices
go\'emment can make, thi s is nothing new. tv1oreover, the range of choices available
to goYemments is great er than that imp I ied by some of the simpl er versions of the glob-
alj sation thesis. The largest chall enge to government comes from the disillusion that
many citizens feel about the operation of traditional forms of representative democracy.
fuell ed by the idea that all goYcmments are the san1e and arc too closely linked to
powerful ,ested interests to the concerns of citizens at heart. The German novelist
and \obel Laureate Giinter Grass. re\ icwing the state of German democracy. has argued:
1'\ow. l bel iev .. that c. 1 1 . c.
c our rce Y e ected members of parlt ament arc no longer ,ree
to decide. The custo , , .
nMry party pressures, for whtch there may well be
arc not critical here t . , h . f: s
. ,
1
I s. rttt cr. the nng of lobbytsts w1th thetr mu1t 1 anou
mtcrests that con t t . d .
. s nc san mfl uences the Federal parli ament and 1ts dcmocra-
ttcall y ele(;ted me b . 1 . t
. m ers, P acmg them under pressure and forcmg them ln
drsharmony even \ 1 c: . F rs
v len rammg and deciding the content of laws. avou
' f
. GOVERNMENT
GOVERNANCE
Example 4.4 The importance of government
11
. tin1! on hi s role a") a key ad\ iser to the \ , , L
lh' t: t: ... e\\ abour
. . dolll bd'-' 1997 and 2005, Geoff rv1ulgan
11
. . . . government in the United
I Ktng as ,u gucd:
I
t is ,videly assumed that governments ha\e
1
.
1
os powcr-u w . 1.
market or Brussels, downwards to the people . P aic s to a globalised
. . . , or out\-vards to th .
and the mccll a. Th1 s tS one of the reasons \\h" ..
1
c pn\atcscctor
. J \O<.:t a democrat' .
have reined 111 thctr ambitiOns, and 1 expected
1 1
I( governments
. . o cave govcrm
conscious of 1ts constramts than of it\ .
13
. ncnt more
. tcs. ut mstead 1
convinced that the perceptton of is . .
11
. came away
, an I USIOn. Strono [I d
li mit goYernmcnt s room for manoeuvre: gl ob I . k , e orces o
c m,tr cts and treaties
Ji m its on economt c polrcy, and the media and business .
. . constram government as
much as churches and trade un1ons dtd a few decades a
1
y
1
.
. . . go. et t 1c baste powers
of governments have not dtmmtshed. The capacit)' to tax " ., .
. . . . , 10r example, remams
10 rude health. Across the OECD. share in GOP l
' ' las nscn O\er the
past fc\v decades; even the tax take (as opposed to the rates) on fit h
, . . pro s as gone
up. Many of the world s most compettttve economics arc overseen by relativelv
big governments. Moreover, governments' ability to deal with problems
pollution and organised crime has been enhanced. not diminished. by gl ohali sa-
ti on. And whil e governments have reduced their roles in running economics _
the vast bureaucracies that a generation ago were running nationalised industries
have melted away thi s retreat has been matched by a growing role in health.
old age. chi ldhood and security. The idea that govcmmcnts have become impo-
tent is an il Ius ion. albeit one that can pro\ ide a useful alibi .
Source: Mulgan CW05: 24)
minor and major smooth the way. Reprehensible scams arc dismissed as sorl)
mi sdemeanours. No one any longer takes serious exception to what is nO\\ a
sophi sticated system, operating on the basis of reciprocal backhandcrs.
Consequently, parl iament is no longer sovereign in its decisions. It depends. on
powerful pressure groups- the banks and multinationals which are not subJeCt
to any democratic control.
(Grass 2005: 3)
Wh. . . . . . . . - , h A lerica. there arc signs that
tie thts d1srlluswn 1s n1ost e' 1dent m Europe and "'ort n f d,, , rnu
. F' ding a means o t:Cpt:n e
It ts a malatsc that is affecting even newer democracrc\. lil . d .. play
d . . 1 , 1 alth of soc1et' an c,lll
an extendmg democrati c processes JS 1mportant for t lc.: lC .
1

1
d r 'gional
I
. h t underpin oca an t:...
a roe m shaping the kinds of principl es and \a lues t a
1
. t s!..
1
far from
d 1 ., 2 although t 11s a.
eve opment strategies that we introduced tn Chapter ' . f narratives
t .
1
, the 1mportancc o
s ratghtforward. In the end, however, nothmg rep aces . . . ,. and environmental
of tl f soc 1al 1usttcc.; '
le good society' with thei r competmg vtsions
0

1151

152 I
FRAMEWORKS OF uNDERSTANDING
. . .
1
t at the internatiOnal. national or regional and local k\ ,1 \
u ...tamabllit\. \\ tct tt:r' , I I I f t: \ c ret
. . : . th .. conclu
51
ons in C haptcr g. Part o t 1c boo h. addrc"" , 1 urn
to such I!'SUt,; ll1 c.: . d . .. I , , l: " t lt II
. . , h and pollc
1
cs of local an rcg10n.t dc1 dopmcnt \\ , llcr.
'en lion JOst!llmcn . ' . . ' . c hcg, h
. h b'li .
11
;
0
n of intllgcnou> potential m tnc next chapter n
1
t C 1110 I Sc
Further reading
f
. . rei icll of the changing nature of the ,tate, g<)\ cmmcnt and go1 crnancc . , ,
OJ a . . J h , sec M .
R and unlcv. p. ( 1997) '1 he Po,t-!<. C} nc>Wil slate an< t c spacc-cconom , . MtJn.
. . . l d cd ) ' m R L
and J. Wills (cds) of . on on. c ward Amold; Jessop, B. j cc
capitalism and
1
ts future: on rcgul.ttlon. go1 cmmcnl and govcrnanc . ( 997)
of /merna 1iona I P oli 1 i ca I 1:l onomy 4( 3 ) : 56 I 58 I. <. R "''tew
On in the contc\t of globaltsatJOn, sec Dicken, P. (2003) G/oha/ Shift: Re .
1he Global Economic ,\lap in !he ::I 11 Cemw:r (4th edn). London: Saoc shapmg
For a rc1 Je\\ of nC\\ rceJOnali,m. 'cc Kcatmg. M. ( 1998) The \'ew Reoi<;n;f. . .... ....., w 1\111 111 Ji'
Europe: Territonal Restrucrurmg and Pofrllcaf Change. Cheltenham fd\ , d estern J \ ar Elga
On the rdationship between devolved go\'cmmcnt and governance and rcgio 1 . r.
d G 'II " 2005 0 na mequal't
sec Rodngucz-Po c. ;\, an 1 ' ( ) n the "economic dividend" f d, .
1
y,
Re!!ional SIUdies 3 9( .t): 405 4 20; P1kc. A. and T omaney, J. (2 004) Sub
0
. cvoluhon .
d
. d . I d I . -natiOnal govc
nancc an economtc an ')octa C\ c opment , Environment and Pia r-
2091 2096.
1111111
lJ A 36(12)
On multilevel go\emance, sec Bache, I. and Flinders, M. (2004) Multi-level ( ,
Oxford: Oxford University Press. ,o;ernance.
On ce Fung. A. and Wright, E.O. (2003) 'Thinkin ab
parttctpatory go\ernancc'. in A. fun<' and E 0 Wn'ght (eds) D g .out empowered
. . . . eepenmg D .
fmtlllliJOnal fnnovatwns m Empowered ParticipatOl)' Go . . L emocfacy. vel nance. on don: V crso.
Introduction
Indigenous development is based upon the naturally occurring , , f .
. f . h. I . . !:>Ources o economic
P
otenti al gro\vtng rom V.'tt tn ocahttes and regions. lndigeno h
. ' ' us approac cs are a means
of nurtunng hon1c-grown assets and resources that may be mo
1 11
d .
. rc oca y an renton-
ally embedded, perhaps more commttted and less willing to divest . d o b
. . , an more capa lc
of making endunng and sustainable contributions to local and rcg
1
onal t
1 <eve opmcnt.
Strategies of indigenous local and regional development may seek to make places less
dependent upon exogenous or external economic interests. Indigenous interventions
connect di rectl y to the botton1-up approach detail ed in the Introduction in Chapter 1.
They seck to work with existing assets and resources from the ground up to explore and
unleash thei r potential for local and regional development. Beyond the superficial attrac-
tions of lo\vcr cost factors of production such as land and labour. traditional top-down
and centralised approaches often overlooked or ignored the assets and resources deeply
embedded in locali ties and regions. In the context of the heightened globalisation
discussed in Chapter 1, the enhanced mobility of factors of production has arguably
increased the significance of indigenous strategies that recogni se the importance of
places and their embedded characteri stics. If capital and labour can, in theory, locate
anywhere across the globe each tnay become tnorc sensitive to differences in assets and
resources between pl aces.
Central to the indigenous approach is the idea of latent or somehow underutilised
. . . .
1
t to make or thctr
assets and resources that requt rc n1obt ltsat10n or stunu a ton
substanti vc con tri buti ons to I ocal and region a! de\clopment (Goddard et a/.
1979
N I
t f ad' ice encouragement an
ew business ideas that go undeveloped for t 1e wan . .... . , i
. ffi . nt manavcnal e\pertJsc. (ltll
support. fim1s that fail to grow and develop due to msu ctc o . , .
. . . . b . h I k of local resources ate t.: xam-
aspuattons for education and tram1ng frustrated }
1
e ac .
1
can be
I
, . M h II' a such resources 111 P a
Pes of unfulfilled economi c potcnttal. ars a ltlo . fi ,
11
for local
c. . . . . . . I . s as well as stgnt Celt
ulfilhng for tndtvtduals, households and socw group d .. ...
1
"d potent .a I of
. . . ,. ed or under c\ t.: ope
and regtonal development. Realt smg the untapp .d bl t'lsk Barrier" can
d' . . . . be a fomH a e '
tn tgenous resources tn locahttes and regtons can .
1
nnrkcts as ,\dl tts
in I d 1 t ,d local and rcgJOna ' . ,.
c u e tnsuffictent access to capttal, 101
1
c . formation and turthct
I
a 1 ism busmes
5
'
cu tural traditions weakly disposed to cntrcprcneunc '
education and learning.
j ,56
. .
D POLI CIES
tNSTRUf..1ENTS AN
! NTI ONS:
INTER\ . .
1
for indigenous approaches to locn l an
1
. .
. . the r(tt IOn,t t: . < 'eglon I
rt dwptcr ' . tpltalising upon mtllgenous or naturall v . d
11
" 1 tJillt:u <It {;, J 0 l curr
1

11 J r h roo ' ' . t f f . . I . r

I .,pmcnl ;uw t,; gJ ow l t otn wtt llll lol"tl "t .::>
de\'- < .. . I and pronwung t,; . , ' ' I les and
10rn1c pott.rlt1
1
n t ot urH.kr stttrH.fJng 1n Pan
11
.
t.\.OJ w the dJ t:t dl . l flstru
r"uiOll!>. Connecting d f >I" establishing nC\\ busme ...,c,, growm!-! and sust .. -
t:e- m: < dllllfl,,
m and pohcte<..' ' I . tnd ur'radtng ldbOUJ. lon<.:luSIOil\ ,tre offi J .::>
c ..., and de\ c opwg ' that
C\l'>tlllg bU\IIK'"<.; . j f' "tJtions of tht: ttHflgcnOU._, ctpprodch.
rctkcr upon
the potcntwl ,Ul( JJ11J '
hes to focal and regional development
Indigenous approac
. . h onnects to the t:onceph and theories of local and reg .
Tl
J ,cnou' ,tppr o,lt: c . tonal
te
10
Ig --d . 3. In their cmpha-,1-, upon the re-,urgcnce of local , d
... 1 pment dr 111 an
Ot,;\C
0
, tran-;ition models thts as aevelopm
r ... oJOnaf cconOllllt:'>. . . . Cnt
t:e- .. .
1 99
0) Th1-.. \ iew mdrgenous approaches as bottom.
from below
1
tom . . . . . up
, u d nurturin!! cconomtc actiVIties that arc en1bedded tn localities
wa\ of grO\\ m= an .... . . . . '
,
1
to draw upon the d1stmct1ve local and rcg1onaJ strengths and charac-
regJOn:s.
1
h fl b T
tensnc of dynamic indu"tnal cspcc1aJiy t c1r ex1 1 rty and adjustment capa-
btfltv. Polic) mtcn entJOns can promote the of locally decentralised
production net\\ ork!). local agglomeration and local network_s of trust, coop-
eratiOn and compet1tion as well as the local capactty to promote soc1al learning and
adaptation. inno,atwn. entrepreneurship (Stohr 1990: Pyke and Sengcnberger 1992:
Am in and Thrift ) 995: Cooke and 1998: Crouch et a!. 200 1 ). Problems have
emerged in atlc:mpts to implant simp! versions of the industrial district model rather
than adapting u to particular local and regional ci rcumstances ( Hudson et a/. t 997;
Storper 1997).
and ocio-cconomic approaches overl ap with theories of innovation.
knowledge and learning to emphasi e the i mportancc of local and regional institutions
in developing indigcnou asseb and resources and protnoting adjustment capabilities in
localitic
1
and regions (Bennett et a/. 1990: C ampbel1 1 990: Storper and Scott J 992:
A min and Thrift 1995: Scott 2004 ). Instituti ons - both fom1al such as organisati ons and
infonnal such as networks - can mobilise potential assets. promote innovation and shape
local and regional supply-side (Cooke and 1\llorgan 1998). Jnstitutions are
also central to explanations of why locaritics and regions have failed to adapt and o'ver-
the Jock-ins that can inhibit growth trajectories (Grabher 1993: Cooke 1997 :
\\ olfc and Gertler J()()?J R .
. - - ecogmsmg particular structural problcrns and dJstmcuve
m place and devclo d.
. : pmg context-sensJttve poltcy instruments have long tra
Ohrschman 1958 Sec 196? . .
. . . rs ). :. xpenmcnts are encouraged. dra\\.ting upon more mtcr-
c and forms of policy-making. and new institutions are built to develop
JOint workmu and partne h. .... d
?002
1
. rs
1
P to address shared problctns (J\1organ and Hen erson
- ). ntervcntJons may b . . . . _
b. , . . . e llltcrocconom1c and focus upon the supply-stdc m com
mmg hard Infrastructures h . . . ' ft'
suppon . ' sue as broadband tcJecomtnuncat1ons lmks. '.vtth
50
or networkmg and k
1
. . e
new busin b . now edge transfer to build innovation capac1ty. cncourag
ess est a l1shment a d 11 tive
knowledge c n CXJstmg business growth and to fostl!r co ec
reatton applicati d I '
' on an earning (Morgan 1997 ).
M 0 B I L I S I N G I N 0 I G EN 0 U S
POTENTIAL
new endogenous growth thcorie .
1
.
. . . s lave contr'b
I
"nking about the potcnttal oJ Indi genous
1
.
1
1
uted much to the rc
1 t 11 oca and rc:gio ,
1
d ncwa of
r
1011 cndogt.: nous growth .from \Vi thin local it' . . _nd cvclopment. The em h .
u .
1
d. 1cs and reg
1
un P asts
)oli cy intcrvcnllon. n tgcnous approaches h b s opens up
J J . <tve cgun to ex I or
the local an< rl..!gJOnal external economics . P ore the ways pnlicy In"
' ..-. .
1
central to tncre . ay
n
ous growth. I hcsc 1nc udc Alfred Marshall 's
1
. b dstng returns and cndogc-
. a our market r
a,ailability and technological knowl edge spill <>vcrs h .poo _
1
ng. specialist supplier
'b' l' f t. db 1 t at were dtscus t
he po<.,<:; J 1 tty o crca mg an u1 <.hng compctit' , , , a sc<. 111 Chapter 3.
. . 1\ c au vantage and l r
ceo nomic act tv tty (Porter 2000 ), rather than simp! r
1
. J oca tsc<l clusters of
tagc of inherited factor endowments has furthc Ymg the comparative advan-
. . . ' . n.:u Interest tn indi I
Poli cy tntcrvcntions gUided by these concepts targ k . genous approaches.
c mar et failures fo I d .
labour (Bennett and 2000 ), seck to ensure the
1
r an , cap1tal and
c ear communicati d
to market (Acs and Storey 2004), and emphasis-- h . an response
. I d 1 E . e uman capnal, Innovation d
tl!chnoJogtca eve opment. :.ndogenous approtches hi
11
. h h an
< g
1
Ig t t c need for a .
balances bet\veen localisation to promote externalities and, ,
01
.
. agt:: omeratwn economics and
external connection to national and mternational fl ows of
1
d .
. . . goo s, serv1ccs and know-
ledge (\t1artm and Sun ley 1998 ). In additiOn. as we discussed Ch
3 . . m ,aptcrs and 4 the
gro'" th-oncntcd focus of current new regionalist' local and rc ,
0
.
1 1
.
1
'
. . . . gt na po 1cy p aces a
premium upon the of 1_nd1gcnous development in increasing the economic
performance of every reg ton and ra1scs the issue of territorial equity and balanced local
and regional development (Scott and 2003 ).
Sustainable development resonates strongly with indigenous and grass-roots local and
regional development (Haughton and Counsell 2004: tv1organ 2004). The development
of policy interventions more sensitive to the relationships between economic, social and
ecological issues and with a longer-term outlook is increasingly evident. Business can
be interpreted as a contributor to economic growth and employment creation within
mainstream markets and/or a ' social enterprise' with broader social, economic and
environmental aims capable of tackling localised di sadvantage (Amin et a/. 2002; Beer
et a/. 2003 ). The pron1otion of more sustainable stewardship of indigenous assets and
resources in ways that encourage locally and regionally appropriate and sustainable
fonns of Jocal and regional deve]opmcnt has been sought. "\Veak' sustainable develop-
ment policy interventions include the usc of environmental regulation and standards to
develop nc\v businesses. local trading net works and ecological taxes on resource
usc and pollution (J Jines Gibbs 2002: Roberts 2004). strong' sustamablc de vel-
. . . k" 11-scale de-centralised and
opmcnt has promoted poh(;y JnterventJOns see mg sma ' .
. . . t elf reliance and mutual atd
localised fonns of socia] organisation that promo e s -
(Chatterton 2002)
. . ,. . d ions chimes With tndlgenous
The aspirations of post-development tn loca 1t1es an reg . .
11
,
ts leadership and natlona ) ,
approaches in its emphasis upon empowered, grass-roo (G"b _
. . d rms of development son
regtonally and locally appropriate and dctermtnc
0
1
approaches
. .
1
b
1
-up and grass-roo s
Graham 2000 ). Post-devclopJnent proposes radtca ot om . 't' n of top-down
I
, It r l'Uives to the mposJ IO
to <>cal and regional development that present a c r' , lall)' derived and
l
. . I ocrtlly anCJ rcgJOJ
models developed and imposed by extcrna "'. ' , 'cd econornick better
I d
. . . . . . re d,verse or van .
e poiJcy mtcrvcnt1ons have sought to nurtut e mo . of localitte and
. . . . ..
1
,.ds and asp1rauons
sutted to the particular econom1c and socw nee
--
157
,
AN D p OLICIE S
INSTRUMENTS
INTERVENTI ONS. . . , ... " . . .
J()()..J) fnitiat t\ tndudc I 'Xchdngc 1 rad
111
!) t
1 -Graham - . d , . J , 1 l:
, (GW!'On . . . d an s ccOtHJ, tf) lll 4ll "cts tor l,th ..:\
n:g .. I 'Jltcrnn .... ,In our ' l!nou
a.,. L t r ... \
, I ?()OJ). .
. (Lt.:\shon1ll.- 1 1 1
and sen tee . h t<.l "orr-. \\ tt 1 t lC gram of IO<..'ttl ,lfl
1
.
. d'acnous appro,H.: c. <. 't:ulonal
In 111
1
c " to implant unconnected J!\st.:fs dnd r csourct:. '
1 ' r than " \\ ltn Inti
ccononuc. rat lt.: hr dt:\ clopmcnt is ccntr tl t e
. k u... " it h ill parttcu ' ' . . ' o lndin
C\ JSt Hlg 1111 Jrl l' the rdationships bch\ t:cn cconom\ so. oe-
. ... t on Jr1 e .; L let} Ulld
nou mtcn t,; fl
1
t' .
11
--r-"cak und llll'l'ctncntal de\ elopmcnt and en b .. J
the benefit o sma c . .
1
t:<Jdtng
ccolog) h, . 10n.: to the d(.;\ clopmcnt aspJnl tJOns and ne d
l
, -term approac n . . . e s of
ongtr. , . , L )cal nnd regional mstttutJOns play a central role in in<.Iig
1 .. lit1cs and rt;gtOn c .
1 1
, . enous
o<:a . d . t 'rnr 'ting local and knO\\ edge of cconom
1
c and .
olic' in gathenng an tn t t t: . . , .
P - . buddin<' '' orktng closely and prov1ding on
1

and conte'\ts. ::: . . gotng

,
11
b Jidmg net\\ and mutual lcamtng and cooperatiOn amono n
up port a '' t: a u .... . eers.
. . . can mdudc the public sector as well as the soc tal partners of org
FonnaJ 111. tltutwn . . . . . an-
. b . and bu a ocJcttlons. and c1vtl soc1ety.
1 cd Ia our umon . . . .
To proYide the foundat 1on" tor more contcxt-sens1t1ve p?ltcy, tndi genous 1 rlten en-
ttOns arc founded upon dcra1lcd a::. cs mcnt and understandi ng of how particular local
and regional economic actually work. They retain the potential for selectJvity and
targeting in de\ elopi ng mitinti to address parti cul ar needs, for example tapping into
the entreprcneuriali m of black and ethnic n1inority groups, addressing the vocational
trai ning need of young pGoplc or meeting the needs of specific di sadvantaged commun.
ities. G. ing the di tinction from Chapter 2, the obj ects of indigenous i ntervcnti 1ns are
indi ' idua l . entrepreneurs. micro-bu incsses and SMEs and the subjects are establishing
ne\\ bu me ses. grO\\ ing and ustaining existing businesses and developing and up
grading labour. The foJIO\\ ing secti ons examine the instruments and policies deployed
in the indigenous approach to local and regional developn1ent.
Establishing new businesses
creation of new businesses is a fundamental elernent of indigenous local and
regtonal development E"tabl' sl b f r.
. ,} t 1mg new usmesses IS an tmportant way o JOStenng
cconomtc actiYity and ta d . . .
. ppmg mto un erutlltsed resources in localiti es and regwns.
Entcrpn c the readinc t ... b k
s o em ar upon new ventures wit h boldness and enthustasm
- and entrepreneurial ism th b'J
. e a t tt) to seck profits through risk and initiati ve are
Important assets and rc . . . . .
. . . sources \\ tth the potent tal to contribute to econotntc gro'' th.
mcorne generation and b
. . ' JO creatton (Annstrong and Taylor 2000). Entrepreneurs can
- pponunttt e and reso , h . . . t
returns and h fi h . . urcc t dt arc currently yteldtng low or non-e;<Jsten
cmmtoh
1
nh" . . . .
increasing effi . o cr-retum act1v1t1es through establi shing new bus1nesscs.
. . "' Clency through mo.... . . . . . -
litton U\cs and St optunal resource allocatton and 1ntcns1 fymg compe
. orcy 2004 ). s . . . . .
environmental a . f' octal entcq)nsc Wtth broader soctal, economtc and or
Ims, or example b . . .
traiuing and work . nngt11g formerly n1arginaliscd groups into educatJOn,
or tmprovmg de , , d . 1
1
t
as a route to new b . gra andscapes, has becon1c increasingly unportan
us mess cr at (f) b n
ton >ccr et a/. 2003 ). Sel f-ernploymcnt can c a
MOBILISING INDIGENOUS
POTENTIAL

11
ttnt "oun;c of 'self-help in pla,e" h
1n1p<. ' . . " v. ere labo
employers a.rc or low quality. ur market opportunities among
1
he geography oi bu&mcss start-ups IS ht ,
11
. g 1 y unl!\ en ha .
Jcvclopmcnt pat1tcul arly tn disadvanta ' Cd l . . mpenng local and regional
' t' rt p t t ' g P a<..;es. 1 able 5 1 h
tn s ,1 -u Hl cnst Y across b . " ows the sp'ltial
1. . . te\ Y rankt n , th '
local itics and rcgtons m Germany. The most pro. . . g c top and bottom ten
.. ld . spetous places of F k
J l
arnburg and Du5sc orf and the1r surrounding r ... . h ran furt, \ilunich
cgton"> a" e the . '
apital ' and pcrfonn markedly better than the lc , . most entrepreneurship
c . . . . s& pt osperous pla .
P
rcneurshl p capt tal 1n the older mdustrial areas and " ccs With less entre-
. IOrrncr eastern L" d
a
nd Kci Ibach 2004 ). lntcrnattonal comparisons reveal th an er (Audrctsch
. . . c\t new firm
broadly similar wtth rates tn the hjghest perfonni n, . orrnatton rates were
. g regtons at bet\veen t ' d "
times that of the lowest perfom1mg regions ( Rc; nolds eta/
199
. \'-'O an 10ur
d .
4
). The htghest rates f
new finn formatton are evt ent m urban reg
10
ns with h' h . 0
. .
1
g propontons of cmploym t
in small firms and ht gh rates of m-migration (Acs and St .
200
en
d f
-c orey 4 ). Prosperous and
densely populate areas o 1er large and potentially di, er k
. . . \e mar ets for goods and
services, supporttng a dtverstty of opportunities for new busmcss establ h L
. . . . ts ment. ocal
tradtttOnS of bust ness start-up and tolerat10n of fai lure can encourage th d
o er:s an attract
entrepreneurs from beyond the locality or region.
Table 5.1 Start-up intensity by locality and region in Germany, 1989- 1992
Rank Locality /region Start-up mtensity
1 Muni ch, surrounding area 24.6
2 Dusseldorf, city 20.2
3 Hamburg, city 19.7
4 Offenbach, surrounding area 18.6
5 Wiesbaden, city 17.7
6 Starn berg 17.1
7 Munich, city 16.1
8 Frankfurt am Main, ci ty 16.0
9 Hochtaunuskreis 15.9
10 Speyer, city 15.4
318 Lichtenfels
5.6
319 Trier-Saarburg
5.5
320 Herne, city
5.5
321
Graftschaft Bentheim
5.4
322
Hoxter
5.3
323
Bremerhaven, city
5.3
324
Tirschenreuth
5.2
325
Coburg
5.2
5.2
326
Cuxhaven
327
=
Kusel
4.8
Source: Adapted from Audretsch and Keilbach {2004: 95
6
)
Note: Start-ups per 1.000 population for all rndustries.
,._
l&9
AND POLI CI ES
INSTRUMENTS
tNTfR\ \ . . , , " . , . ,
. , f thctr unpacts rt:tna11l s ambtguous and un .
1
..
. . . f the t'\ 1drncc o .. , . .._ t\ll ( \ . 0
. . to cncouttlgc the fotnMtt nn mt {:'
00
-J) 10fiC\ lllfCI\ t: I - , < l
and core: 1 I .. . , t,
1
d the ot of product ton . ,
.. t:\ c.:r c \.\.:flft<tl
10 of nc.:\\ . , tr the cround . .. or the tntcrnattothll de, dopmc
1 . ", nomrc entitles o .... . ... , . , . . ' Poltc,
netnn!.! ne'' t:tO r ,
11
,,urshlp Ill localities t1nd rcgtons b -
:: - . OECD cntrcp l "' . . \ \ th
r n the ' 1 e
orcJnl a w .
1
the ot tran1e\\Oft.. con( and the
0
. ,
.. f h" "ntrcprcncuna t u 1\.:!\ence
strength o t t t.: rt . and programtnes ( fable 5.2). Suppon s. .
. f ubltc suppo
11
. .t.:n tees
and quallty
0
P . t ' !lf'ltcd progranuncs. rnthcr than dt sconncctcd ... rr
d ,, ard more rn l;c- ' .... " ctvs of
ha\e rno\ c to ' -. t ,
1
nc- top-shop approach where entrepreneurs and flcd .. t
. cnt , often u. nu! t lt <. . g lllg
tn .. trum . . . ;
1
in,titutwn ftlr ad\ tee. mfom1atton and net\.vorks ( \rmstr
finn . can accc . cl stno c . ong
utd Ta\ lor 2000). . d b
' . . ft ,. , the ourccs or nC\\ entrepreneurs an he lo
1
In to m ucnct: .. . . . ca
. .. t f and cntrcprcneunaltsm rs often the rnost dt ftkult
and rcgtonaf contt;\ o t t; . . . to
- t). ha' e deep-rooted lcgacrcs and trad1t1on that shape people s att.
-hape. Place. o tCn ( . . -. . . 1-
d b
'
. "' nfltl"ncmo thc1r tO\\ ards starttng new firms and be ng an
tude an e tel:. I t: . . . . .
I
rh t mhercnt n and respon tbtlttJes. Entrepreneunal propensity , aries
emp O) er '' 1 1 .
geographically (Ac and 2004 ). \ aw m Chapter 2. for more asso.
or cooperati\ e rather than indh iduahsttc forrns of entrepreneunalt sm are deemed
more appropriate and likel; to "' ucceed in \Vales due to its particular economic and social
hi tor; (Cato 200-l). Indeed. encouraging business start-ups is difficult in oJd mdustrial
Table 5.2 Foundations of entrepreneurial vitality
Local entrepreneurial culture 4ttitudes to employment and enterprise
Local framework cond tions Existence of role models of entrepreneurial behaviour
Entrepreneurship skills
Existmg public polictes
Access to finance
Educatton and training
Exchange and cooperation networks
Bureaucratic and admintstrative barriers
Infrastructure, such as business sites and premises
Influencing attttudes and motivation
m OECD {2005c: 4)
I
M 0 B I lIS ING IN0 I
_...
. 1s 111 hich an 'employee' rather thm ,
1
-
. . ' emp oyer' cult
hi storica l labour market dommance of large . ,
1
ure predominates due t
. , . lnuustnal em l o
'ricm:c of Crlasgow m Scotland, Checkland (
197
) P oyers. Drawing on the
C\PI.,; . \) used the -
. . , to tk scribc thts c t CCt - an Afncan tree wl . .. metaphor of the Upas
llt:C . . 1osc '' tdc branch
. 1 t n.:acht ng and nurt unng growth beneath tt es prc,ent the sun-
ltg 1 ' . . s canopy. l:ch .
... arch in the Un1tcd Kmgdon1 suggests policy tn "'. omg these senttments.
t . . encoura . . . .
I
. ted human capt tal to start bus messes may have
1
. . gmg tndJvtduals \\ ith
11111 neg Igtblc effect
1 cas (van Stel and Storey 2004). Such ' destructive' . s m
at Cnhcpreneurshi d.
xi sting businesses through low-price competition but ulti . P tsplacc
c . 2004) mately pro\e unvlable (Acs
and Stot ey
Identifying and stimulating potential openings for new b .
. . usmesses and cncouragi
ndividuals and groups to develop thetr busmcss tdcas arc ..
1
ng
1 centra to cntrepreneurshi
P
olicy (Armstrong and Taylor 2000). Unmet local and regional n d . P
. . ee s m new market
or areas \Vhere current prov1ston ts poorl y performin J k .
o . . . . g or wea may provtdc
the opportumttes for new bus1nesses. Explotttng the benefits of ne . - .
\\ tnnovat10ns and
technologies may be another source of ne\\ economic activttics Linkmo t th
1 . . . . o o c supp y
chain needs of new tn\vard estment proJects may market demands for goods
and services. Exan1ples may tnclude affordable childcarc provision: component subcon-
tracting, personal services, recycling and internet-based sen
1
ces. Recent policy atten-
tion has also focused on the potential to create local markets through the procurement
of goods and services from expenditure by public bodies such as local go,emments.
hospitals and schools (Morgan 2004 ). Social businesses in communittes
can be established with targeted support to tap into public sector contracts.
Gaining access to capital is a critical starting point for new businesses. The funda-
mental elen1ents of pren1ises, equipment, materials. staff and working capital all requi re
initial financing. Mirroring the une\ en geographie5 oi bu5iness start-ups. access to
capital is marked by local and regional dispantics and finance gaps for specific levels.
sizes and sectors of firms and types of funding (iv1ason and Harri son 2002). Table 5.3
illustrates the situation in the United Kingdom and the manifestation of the high degree
of spatial centrali sation of financial institut ions in and around London and its south-
. 1 d' 'b f t nt funds (Klaoge and \t1artin 2005). eastern b1as tn the reg1ona 1stn ut10n o mvcs me o .
. d 1 t the share of venture capttal
Across each of the earl y stages of busmess eve opmen ,
investment in London and the neighbouring South East region is the
1 tock of bus messes tn these
would be expected by the respecti ve shares of the nat10na s .
. bnational financtal system
regions. Scotland benefits from its relatt\ ely autonomous su .
1
la-
. . deat1h of venture captta re
but the lagging northern and \vestem reg10ns expencnce a .
1
. h alue land and
. . ften benefit from 11g er ' '
ttvc to their business base. Prosperous regiOns
0
. . tment capital. In
I
'hich to borrow 1m es
property prices that can act as collatera agamst " rt d the enterprise of
d . . . . . d have suppo e .
eclmmg locahttes and regtons. redun ancy pa) b th lack of altcmatl\ e
d . If emplo) mcnt y e
reluctant entrepreneurs' often pus he mto se -
jobs (Turner and Gregory 1 996). of the is both
. . . . . t. ons and purpose . i' .
Where capital I S lacking and/or the aspu a
1
. ide routes to 111( 1gv
. . h p structures can P
1
O\
1
, .
economtc und social rnore d1verse ownet s
1
1
,
11111
unity and ctnp '-t;
, ( ' CS mutua s. cot . l .. l
nous local and regional development. Coo pet a
1
' ' b, used w
. . I . f assets that can c
ownershtp arc fonns of collectr,e owners 11 P 0
'

TS AND POLICIES
/NSTRUMEN

I iHERVENTIOIVS.
' f th venture capital market In the United Klngdo
5 3 Regional structure o e rn.
Table . 1.998-2002
Location quotient

AIBO MBI
Early stage
\pans1ons
Total
- Region
1.56 2.03
2 01
2.02
-
London
1.37
j 12 1.20
1.17 south East
j .18
0.62 0.63
0 70 Eastern
0.44
0.35 0.50
0.41 South West
0.46
1.21 1.31
0.99 East Midlands
0.48 0.90 1.00
0.90 \-\est Midlands
, oi<shtre-Humbers de
0.47 0.64 0.64
0.61
North West-Merse} stoe
0.75 1.80 0.75
0.83
North East
0.40 0.64 0.60
0.54
\Vales
0.10 0.28 0.21
0.18
Scotrand
1.24 1.25 0.55
1.02
Northern Ireland 0.39 0.02 0.09
0.15
Total 1.00 1.00 1.00
1.00
---
---
---..
Source: Adapt rom ed f Klagge and Martm's (2005: 405) analysrs of British Venture Capital Association data -
Notes Locatron quotie"t i.Q) defined as a reg,on's share of nat1onal venture cap1tal rnvestment dtVJded by region's
snare of the nationa sloe of VAT-registered busmesses (for 2001). Values greater than untty indicate a relative
concentration of venture cap1tal investment In the regions concerned. MBO - Management buy-out; MBI _
management buy-in.
control. retain surpluse and orient busines es towards the workforce and needs of local-
ittc and region (\\ill 1998: Cato 2004). \\.ithout the need to distribute returns as di\i-
to external financial surpluses can be recirculated among potentially
more commirted local and employees and reinvested in grO\\ ing and sustaining
local bu incs
Other altemati\ e approaches to !)timulating and establishjng new eeonon1ic activities
outsde the mainstream monetary or ca5h economy include Local Exchange Trading
Schemes. LETS arc labour exchange systems established by local communities to facil-
Itate economic acti\ity in the absence or shortage of the national currency (Williams
1996
) Members of a LETS agree to pro \"ide their scrvi ce to one another such as accoun-
tancy. or paintino d d ' ' 1 b
. .... e an ccoratmg. \\hen they perform the service then a our 1
logged m a centr 1 . . . .
. a accountmg as a cred1t under the1r name - they are then
O\\ ed by the rest of th b . d
E h e mem of the system the nun1ber of hours they performe
member chooses the t ,.. t' I b . . I d
. d k ]pc
0
a our Ill wh1ch they '' 1sh to be remunerated. Skd e
'
10
died labour rna . b,. . , h .
orw . . . ' . . } e \\l;lg ted dtffcrently depending upon the preferences ofthe
.::anlser!) and partiCipants of h . , . ..... .
but perhaps ca
1
_
1
t. e S) stem. LEIS have the potential to benefit ttme-nch
s
1
poor oca I busmesse b , J LETS
anJ other Joe 1 s } lmpronng the1r access to hUJnan captta .
a currency systems 1 , d
local and regional d .
1

1
a\ c cxpcncnced some successes and con tn butc to
. C\ c
0
Ptnent (North ?Q()S p rtic
1pation rates and lon ,. .. . .. ). roblen1s may include initially low pa -
. . . gcr-tenn sustamabilit
I he nght type an(l k'll I , y.
s ' eve I of I h . . t
entrepreneurs and , d our arc cntrcal to new businesses. At the outse
O\\ ncr-manager . . b s
may c able to muddle through the early stage
'

..
---=-
MOBILI SING INDI GENOUS
POT ENTIAL
I
Plate 5.1 Growing indigenous businesses: a small firm Incubator in Eindhoven, the
Netherlands
Source: Photograph by Dav1d Charles
of de\elopment but as businesses expand functional divisions of labour and technical
expertise become n1ore important (Campbell et al. 1998). Local labour market mforma-
tion and n1atching as we11 as professional support and skilb upgrading can be supported
by targeted pol icy i ntcrvcntions. H owevcr, existing entrepreneurship strategies
mon1y favour those individual s who already possess superior financial, human social
. 1. . t. . . explotcd in more detatl bciO\\. assets. lndtgcnous labour market po 1cy tntcr ven 1ons aJ e .
. c 1 policv inten cnt10ns have
To root and support ne\v business tOrmatton m pace. J . . ,
. . . . f priate s1tes and p1cmtscs
utrhsed property-based approaches. The prO\ tsiOn o appro < . "'
. . . i t sport can pro' 1dc tht:
ltnked to the vital infrastructures of te1ecommumcatJOns anc ran .
. f the capital stock m neo-clas-
local and regional spaces for entrepreneurshtp. As part 0 ' . . b
1 . . , . d t. n Busmcss mcu a tors. or
steal theory such elen1ents arc 1nteoral factors of pro uc 10 . , ,
. , . . e . . " b ro' tding common sen let:').
example, arm to r n1prove surYtval rates for nev. buSJnt;SS ) p . . d d har d
1
ccom-
. . '!'. d bl ftcn subsldt <\C . an s ( t '
mfrastn1cture and peer group support 111 at.o a e,
0
.
1
, anJ
. . . 1 for more appropna 1,.;
modat10n. Once estabhshcd, bustnesses then cave . l . d. enous loc,tl and
th I b t connect wtt 1 m 1g
e mcubation process begins a gam. ncu a
0 1
s d r groups. for
. . . . i s laces an o "'
regtonal development by targetmg part1cular actl\ It P . . . th and such
. . t} ic mll1orttres or) ou . .
example marg1nahsed groups such as worncn. c
111
.
1
,
5
1 an tnLu-
<;;; 1 areas. txamp t; ... ,
as mner Clttes peripheral housmg estates or r ur a . .
1
the
. . . , . . . . in Cmctnnatt II
bator Initiative for black and ethntc mmont y \\omen

Example 5.1
\NO POLICIES
ft\STRUMENTS
C
. nnati Minority and Female Business
The tnc
bato
r United States
Jncu ,
1 tk Incubator tl n,t or gan1scd in Jl.))
,. , . \ Juwrtt.) ,uw t m, . . . . N9 to I
rhc c
1
,
1
Hncnt L) f mmor tt) ,md ''omen
1
.
, . . II bu.:' rnes ( t:' t OJ . ... . )\is I
rddrt'S!- rht I a ' ' It\\, econolllte <..k\ clopn1cnt corporat ton tnsrdc
' It launcht:d O) 1t L . I ... . , ... d, t b . a Pre,
.. ,
1
'lllf)O\\ennent t one \\" 1ca:: t<.:sl en ttstne::-.scs arc "'l' .b
. . 'ci tlh dcmarc,rtu L ' i . rgt le
' . ... I) Uh md kder,lll) supportcc bustnC!')$ programm "\ r
. l "'ted ttl\ mn .. ntl\ t ' l ' . . c . he
w .Kcl':-- , t . 'pr ncur..., \\ ith but csscntlal bus mess support se,
. . )\ide"' ounc. ttl It t . . . "' h ICes
llllubatl)f pte . - .... . lett -. rfll\Ub . ....cndmg cmatL and crcatmg \\ cbsites for
l 1
l Jc, dopmt!' l . Inter,
1
1m: . .... ,
1 1
lp..., them t1nd tindnctal resources through public and pr
th dtcnr . It ,1 ::-t' K 1\ ate
tactng \\
1
Tl ....,c en JL'l' arc J 'lr\ crcd to tenants through a modular wo sh
,._.\.wr programme . .lc . . . . . . Sk 'll , d . . op !
.
1
. .
1
d, a Prottt . Bustnes 1 s an Butldmg a r>rofit'
''ho .. t' ttt o !Ill u t.: ' ......
.
1
. bl, n
3
uadtlional cld""room scttmg \\ tth an 1nst1 uctor. or as tele-c l'ise ,
Cia arc J\ ,u a c J ' s
h d O
n Jtnc H the entrepreneur s cOin emence through a bus mess du elop
t)\ a the p one an - . . . . .
I
"b . r The programme u mdtcarors to mom tor sef\ tce delt vcrv tv allo\,
ment \\t .t e.
progmmme administrator" constantly to impro\ c based on a steady stream
of feedback. The de' clopmcnt corporat10n s evaluation of the scheme re\eals
that ,, ithin the decade of operation the incubator has created 504 nev. jobs filled by
low-wcome rc .. idenh. S4 per cent of those bu inesscs were n1inori ty owned and 43 per
\\'ere fcmak O\\ ned. Thi'> targeted initiative has achieved son1c success but )U\iness
.... un i\ al remain a and the scheme may reach the lin1its of the local pool of
potential entrepreneur. O\ cr time.
Source: \\ W\\ .cbincubator.org
...
o, crlapping with innovation and technology support, larger-scale property-based
initiatiYes compri e research. science or technology parks for ncw busmesses. Such
policy initiati\ es are often thcmed in a bid to attract and develop the kinds of speciali sed
cJu of businesses discu sed in Porter' s theory of cotnpetitive ad\ antagc in Chapter
3. for example in biotechnology or aeronautics. For new businesses, these in ten ention
are typically connected to the commercialisation and k.novvledae-transfer activities from
. . . b
Unt\Cr _ttcs and re earch centres ( Kommos 2002). Common sen ices may include high
quaht) tnfrastructurcs and t 'd i'. ., . d h
1arc 1acJ 1t1cs. consultmg and cornmcrctal ad\ tcc an tee -
nology monitoring S h . . 1 d
. . ..... uc tntt1atl\ es ha\ e not always delivered and tnay become d1 ute
m thctr focus if a flO\\ f . . . - -
1
.
. .
0
tenant mdt\ 1duals and busines es in the targeted
to matcnahse (\1a t!t a/. 1992 ).
The grow inn so h . . .
reflect d"". h p and kno\vledge-intcn ity of econon1ic actt\ lttes
e tn l c tncrca5mo e 1 . 'th'n
indil!eno ::- tnp upon tnnoYation and technology support wt
1
u approaches to new b . . s to
local and rc .
1
. . usmcss formation. ConnectitF' existing busmessc
. gtOtM tnnovatton s , t.. . j . .
0
,ded
a focus for polt'c . . . ) s ems
01
the ktnd dtscusscd 111 Chapter 3 have prO'
1
. ) (B . .. . ert
nght , patents r., s rllcryk e1 a/. 1998). Securing inte11ectual P
10
P
tct:nsmg oppot1unit'. - . i 1 nent
111
the .
1
. Its other legal safeguards arc key pol rc) c cr
"' cxp 01tat 1on of r . t of the
urn. from new inno\'ations. In the contex

,
0 B I Ll S I N G I N
. . DIGENOUS POTENTIAL
. t}' gt\ en to mno\ atton, ledge mu
1
,. . -
plllH' . . ... , ' eMnmg discuss . .,
.
1
c"sc-.. (rom unt vctsttt cs and research ccntr
1
. eu 1t1 Chapter 3 . ff
bu., u . . . e.,, or cxarnpl .. , ' sptn-o
d r aylor 2000). Lxplottmg the potenti al of ne\\ t . } e: a key focus (Armstron'
an . . . .
1
mologtes r
1
g
, trtl. Pol1cy tntttatt vcs 1ave sought to capital' , or ocal de\elopment ..
Cl:O c , . . ' ISC On the SUCCe\. f IS
.r tricts such as StiJcon Alley tn Manhattan 1\.. y so emergent tndul)tnal
uiS . . . ' C\v ork, based
. wing scrvtcc and mcdta busmcsscs developing f h ... upon the new and fast
gt o . . . rom t e dtg1t1sati ,
fin format Jon and cotTimuntcatJon technologies thr h . on and com ergencc
o . f' h oug the tnternet (1 d
r
l " ocographtcs o t c new economy arc not J't t . n ergaard 2004)
ll: o . . ts spattall] cone .
\llore di verse and gcograph1cally dtspcrscd gcograph , . . . enttatcd, however.
. . tes arc C\ tdcnt makin h
1 55
amenable to targeted de\ elopment polt, (' . ' g sue sectors
e ' . C) \...Orntord et a/ 2000)
[n parallel wtth the une\ en geography of busmc t . .
s art-ups. failure rate [!
C
ntcrpri es arc locally and reg10nally une\ en (Annstrong d T
1
s or new
an ay or 2000) H' h
up and failure rates can suggest a buoyant local and regional . tg start-
. . . . economy Wtth a -,tream of
new busmess opportuntt1es emergmg and bemo explored Th h
o e net c ange and balance
between start-up and fat lure rates reveals \\ hcther cntrcprcncu
1
.
. na acttvny cr<.:atcs net
additions or subtractions to the stock of local and region-ll .
0 ' . . ' sses. nee new firms
arc cstabltshcd they face the challenge of SUT'\'Ivino through growtno a d . . h
. . . o o n sustammg t c
business. Indtgenous pollcy has focused support on these stages of growth in a hid to
maximise the contributions of fledgling and expanding businesses to local and rcgtonal
'"'
de\'elopment.
'
! 165
Growing and sustaining existing businesses
Approaches to indigenous development in and regions priorittse the develop-
ment and expansion of existing businesses. especiall y micro and small and medium-s11cd
enterprises. Table 5.4 illustrates the si/e ranges of such firms in terms of employment.
Echoing our discussion in Chapter 3, small firms arc cent ral to the locall y decentraliscd
production nct\vorks in transition theory. the external economi cs in new endogenous
growth theory, the sinal !-scale and local fom1s of sustainabl e development and the di,er-
sity of firn1 and si/e and ownership structures envisaged in post-de\ elopment.
Positive assessrncnts of the role of micro-businesses and SMEs underline their
b"l' 'dl t ck. up on new
dynamisrn and potenti al for employment growth, thcrr a 1 tty rapt Y o P
1
.
.
1
ft blt . and adaptabtltty due
demands and occupy market ntchcs and their ag1 tty, e"Xt I
1
) c
. . . . . . . (8 h 1981: Armstrong and
to snnpler organ1sattonal and dects1on-makmg structures lrc
. d SME a) be locall y owned
Taylor Acs and Storey 2004). Micro-busmcsses an
1
s m
Table 5.4 Firm sizes by employment
Size
Micro
Small
Medium
Large
-
Employment
0-4
5- 49
50- 249
Over 250
Source: Adapted from Armstrong and Taylor (2000: 266)

TS AND
I NTERVENTIO 1\j S. .
i
, d 'nee upon t?\.tcmaJ cconom tc
d
cducHH! l cpLil t.: ,lfld th . .
.
1

1
J controlk r ...d , , of loldl anJ rcgtotMI
111 1
) rna,
. . hJthcr . .. l ornnl
rJ:t\C rl)re:Hrall: :: d 't'. )fl \t tht' loc ..tl <1nd Jc, el. d, ancd ttn1c01
) ll)l' 111 t\ (.tn n. =-'' . 'flu
and lo;;.llr: tt - \Jr ... l'H1 unckrpm cconon1t c "ttllctur" Cture
. b l''"e" .llld Octte

0 111
.. , ,
1
nd ,
1
nd fa ,
1
r Jbk
b flucru:lttons tn t,; 1 ') or 20oo\
tll . , . f ,tnd \1i rla\ c tt 1.
I
,... nttctl o I l lCtr lack
\ ore <.: , th ,
1
,. vulncrablltt: to s locks ..1nd nl tlrkct .
1
, of
I
, , d po" cr. t.: h . . s ltrts th
.;cat an . rhtn hicr,1rchtcdl suppl) c attb don1matcd b)
1
, etr
d at ... ro"JttOn' "' arger fi
suhor m. t: .
1
and to in\'CSt in long-term project fnls.
h
'ir firm ted tinancJJ . f h . s . Uch
t l ft
1
,,
111
r d scope o t etr rnarkct ( Ha
1
- . a
R D Jnd the o <-'11 \. =- ::- . . hon 199
4
(; ... d R 'ft)lo 2003 ). cl). the nature and sometirnes
1
)
Rodn!!ue1-Po <- an t: ' ' qualitv
- . ,
11311
llrmo; qucsttoned ( Acs and Store) 2004 ). Ir d . . -
o: mcnt 111 . . _ . . . d dn
100
a
. mall finn mav be- h le bu \\ tth ltmrted oro,
rn1cro- an ' . . 'tn amb,.
b d
oeneratino income .;;trcanb 1or the business 0\\ners or nlaKino
uon on ::: =- . . rer onal
. hobbie ilnancialh ... u ... tamable l Oejonckheere era/. 2003 ). The e
mtt're t::> or ' . . . . .. )tnesses
deh\'er \\clcome but ultimately constrained contnbuttons to Indigenous to'-al and
reQJOnal de' elopment.
-Local and regwnal policy int('rventlons ain1ed at indigenous devel opment have de,ej.
oped oph1 ticated approachr to supporting micro-business and S\f
growth and e\pan ion. Policy 1 bede\illed by the unclear evidence of its impact-
hO\\C\ er. and. ,, ithout geographica) targeting. its potentially spatia II) rcgressi\ e effect
in benefiting the more pro perous p1aces ahead of less prosperous locahtie and
(Ac- and 2004 ). In the context of the heightened global competition out-
lined m Chapter 1. enhanctng competiti\ ene:::,s has become dominant smce the 1990s
Tl11 often initiatl\ e ro reduce costs - for example substituting technology for
labour. rat10nah ing organ1 auonal and processes and expand _for
example b) supportmg the de' dopn1cnt of more sophisticated and higher value-added
good and en ice .. Clu ter polic) of the kind described in Chapter 3 has been used to
both of approach. The ethos of inter\ ention can encompass \ aryi ng degrees
of alignment wnh or haping of market . tructures (Bennett and Robson 2000). for
e\ample upporting to make their O\\ n decisions about business strategy in their
peclf1c market context. or encouraging radical innovation to influence market trends.
Research and the local d
1
k . .
. . an reg10na nowledge base on mtcro-. stnall and mcdtum-
stzed bus mess need i . , t .
1
. . .
. en tea In destgnmg support pro(}ramn1es. support
l:r\ tees can ofter both uc . d . . b .
,
11
d \ tce. for example financtal managetnent and planmng.
as \\ e as access to special d .. . ....,
1
,. . L e t;\pcrtt e. for cxan1ple on technolooical or bespoke
r t -\!I\ tce . Polic\ can b I . o d
ocial
0
,. . . - e se ectivc and targeted tO\vards pccific areas an or
oups. De, elopmcnt fro b I , . . f h
'rear d
1
. m c ow approaches emphast e the tn1pm1ance o sue
e t\ercd b\ local d h -
pioneered bv th . ' an regtonaltn:::,tttutions. These en - such a::t t o:>e
J e regtonal develo r I
dtscussed in Ch .._ pmcnt agency ER \ 'ET in E1nilia Romagna. ta
apter 4 - are c 1 " I d ,
capable of mak o . ose to t 1C ground and the user con1n1unity an more
< tangtble md
1

development and cr. .... ( neanmgful contributions to local and regional bustne :1
:::' O\\th (A min a d Tl - ket-
oncnted i . . 'n
1
l'l tt 1995 ). Support for mainstream. mar
e . o.,len dt tlnuui h d f' . l b oader
conOimc, ocial a d . e rom that for ocial enterprises w1t 1 r
n envtronmenta'
1
purpo .. cs.
MOBILISING
. . . INDIGENous p
The \ hton of the capual OTENTIAL
. ' market provd
and and types of ,, c d . .
1
tng fi nance cquallv
. h . . C . aero s pace
J \ crgcnt 1 1'0111 t C C'\pencncc of S 'v1 r s in 1 . ) tn hapter 3 j fi .
' . . oc,t ttt cs and s o ten markedl
'>QOO). (apt tal market fat lure and imperfect" T\!glon\ ( \ rrnst o Y
- ton mean that ) . >no and Taylor
and SM Es can ex.pencnce manv f h gro\Vmg and expa d' .
.
0
t l \ame di ffi . n mg
new tn gatntng access to capital at , ft' and finan
. , . a ordablc r ce gaps of
fccttons occur \\-hen capt tal ts not lent due to tl Internal mark"'t .

1
h 1e f
ment opportuntttes e sew ere. the hi gher tr . o safer alternative .
. . . , n\actt on co
5
t
5
f d . tnvcst-
p
crcci\Cd relative nsks of untned busincssc d
1
eahng with '; \t r h
. . an t 1c scale and . s. t e
Early stage bustnesses may sttll lack the t locatton of the bus mess
. d b fi . . n track record o" d I . .
in\ estmcnt rcqu1re y nanctal to ,d .
1
e 1vcnng returns on
. , . pro\ I c mvestmem . .
HarTt on 2002). External market Imperfections . f . capt tal (Mason and
. . . anse rom capital tr oh
cconOJny able to dehver relatl\ ely higher rate of
1
o t to sectors of the
. return, for exampl
bu i nes C) c le upS\\ tng. e property during a
Indigenous policy instruments hen e focused on d b .
. . . . e t or a d -
fi nanctal owner htp as the t\vo pnnc1pal means of fi . . es n equny or
. nancmg. especmllv as e 1 , ,.,
busme ses are often unable to draw upon retamed earn Th . ar) tage
. mgs. e appropnateness of debt
depend upon tnterest rates. loan tenns and durati on Th
1
. .
. . . c oan L typtcaHy ecured on
the assets of the borro\ver. Collateral and the v1abt1ity of th b .
. . . . e plan arc the key
cntena. Eqwty can be Internal fron1 owncr5 or employees
0
t ,
1
.
. . . . . . r ex ema tTOm financtal
mstttuttons. Each can \'ary tn thetr tnfluence upon the
1
d .
, 1rom regu ar an pas tve
momtonng of financ1al returns to more acti\ c involvement Indt'oeno ,.,
1

. ::: us m ervent10ns to
sh_ape acce .s to_ can incl.ude improving S.ivt E business plans and relation hip:-
wtth financial 1n tttuttons and tndividual investors through effective brokerage and
network building. pro\'iding grants or loans with high social retun
1
locally

and regionall) and e tablishing financial institution-,. programmes and markets with
specific local and regional remits such de\ eloptnent banks and mtcro-fi nance initia-
ti\'es (Armstrong and Taylor 2000; Beer eta/. 2003: Klagge and 2005 ). Social
enterprises haYe tapped into 1ocal credit unions and other alternative sources of typi-
cally locali sed capital (Lee eta/. 2004). The difficulties experienced by m1cro-busincs. es
and SN1 Es in accessing capital have led to JcgisJative changes to addre s dbcnminatory
lending practices by financial institutions individuals and \!otably.
this includes the Communi!) Rein, estment Act in the United States which
depository institutions to in\ est specified amounts of capital m under-served
groups. regions and businesses (Leyshon and Thrift 1995 ).
Sk
11 b . te for oro\\ ino and expand-
J s and workforce developtnent can ccome acu ::: . .
. C h l99"') Providino specrahst and
mg mtcro-bustne ses and S\t1Es (Bennett and \fc os an -' .
t . . 0 "f havino to deal \\ tth
argcted tra1nino is a key area. particularl y for owner manabc ') ::: .
. b
1
, ddre sm<r labour market fall-
Jncreasmgly con1plex and growing es. Anot 1cr
15
a =-. . .
. l . the market ts fcuhng to
ures. particularly relating to skills shortage areas \\ lCte . .
1
"000)
d - d ,. oe inftatwn { Ptke et a -
uce sk1lls and is stitnulating labour poachtng an "al:> k, _
P b 1 d of the labour ma1 et m sp
u he Intervention to kick-start or support the supp ) e . . . , .. ddr S"'
' fi . , Other tntttat:\ a
Ct c occupattons or ski11 groups IS a key polJC) tnstrumc.;nt. . .
1
. and career
. ff' cornp tltl\ e
recnutment difficulties since S\t1 Es can trugglc to
0
cr
:181
..\ND POLICIES
INSTRUMENTS
Plate 5.2 Supporting high-tech business: a technology park in Dortmund, Germany
Source: Photograph by Oavld Cha1.es
de\ elopment prospect:> compared to larger employers. \Ve discuss indigenous approaches
to upgrading and de, eloping labour in more detail below.
Sites. premise and infrastructures remain critical for growing and expanding busi-
ne:>ses. The kind of external central to endogenous growth theory can be
generated by putting growing bu inesses together under one roof. 1 Iorizontal intcrven-
ttons can support cooperation among businesses, for example disseminating a ne\\
technology, and vertical actions which spread information and knowledoe for example
. b '
managenal advice or co . .
. . mmon tntcrest tratmng progratnmes (Enright and Ffowcs-
\Vtlhams 2001 ). The 1 . . . . . .
h
. c ose proxtmny of finns can tncrease tactt learning, knO\\ ledge
s anng and other product"
1
f
, - . . 1\e re attons that collectively improYe the con1petiti\ eness 0
parttc1pam busmesses (Sto .. . . . . . . , I
manifestatio f h
199
?). Thts k1nd of pohcy 1 ntervcntton ts a ph) stca
n o t c cluster pol' , d. . r
example t . I C) Iscussed m Chapter 3. Mana oed works paces. tOr
. argct relatJ\"ely cstabli h d . o . d
shared sen ice s .
1
. s e firms seckmg access to subsidi sed premtses an
:>.
1
m
1
ar to busmcs b d t
specific acti\ itics
1
s mcu a tors. managed work spaces can be targetc a
. socta groups or l .. - " . . t
Growing from tl . P aces
10
r tnd1genous local and regional developmen
1e1r role m su . h
and science parks can d . PP?rtmg the establishtncnt of new rcsearc
un crpm cxtst' b d I
no logy support. \\'hil . ' .. tng us mess growth through innovation an tee
1
,
" e mternatJonal in th . . ns
n.:search and science p k. l eir usage as indigenous policy interventto
ar s 1ave been u- d 1 ent
sc as broader local and regional deve opm
==-=-- MOBILI SING
- __ POTENTIAL ' -
169"
The Bangalore technology h b .
u , lndta
t" on" abound or the oldest and best known . .
l)t:'cnP I . . sctencc park . l
..
1
Liniversity m the Umtcd and the u
11

1
, s .. t lose located around
snnlotl \ctsny oi C b .
' _1
111
A Jcs..,cr known eA.atnple is the burgeonJng . " ndge in the United
K tll.!uo . , 111 JOrtnat 1
.
1
) t'C 1 ndia, where rapid growth in software export .. ton technology hub of
(J'HH!l l , s stncc the \ t
1
'
1
---. due to government-owned and operated Software T ,
1
1
a e 9901) has been
P
urt ) . ' . ecnno ogy Park K
I
'Silicon Valley of 1ndta , the rcgton is home to six
1
. t
1
. k
5
nown by some
'IS t 1C ' n cr tn cd park h
' K rna taka (Parthasarathy 2004 ). The parks arc fed b , Wit m the state
of a . y research staff and t h
, lopmcnts fr01n two tnaJOr Bangalore and Karnataka re . .
1
. . ec nology
de\C . gtOna tllll\'Cl'SltlCS d h
.
1
.tated the productton of semiconductors and micro-proc . h. an ave
fact
1
.. esstng c tps for rna or m 1 _
. al compamcs Jncludtng Intel and Texas Instruments The h J u tt
nauon . . growt of the parks can be
t
buted partly to the pol1cy support they recctve from the national ivl' . f .
at n . . .
1
mtstry o lnfom1at10n
T
, hnology, especially legtslatton that promotes software exports b .
t:C . . . Y o Cnng fiscal
. enti,es to con1pan1es to encourage them to mvcst m telecommun
1
cat
1

0
,
1
h .
JO\_; ns anu ot er mfra-
_tmcturc. The dependent nature of rclat10ns within high-tech sectors between the nascent
Silicon Valley s. including Bangalore, and the ori ginal Silicon Valley in California in the
United States tnay shape its future dcveloptncnt trajectory (Parthasarathy 200
4
).
Source: Meheroo and Taylor (2003)
tools to transfer technology, attract FD I. suppot1 R&D and create employment (Castells
and Hall 1994 ). Such projects arc significant in early stage industrialising countries. for
example in South East Asian nations such a<; India's 'Silicon Valley'. the Ban galore
'technology hub' (Example 5.2).
Developing and upgrading labour
Shaping the capabilities and ski li s of people is the other main element of indigenous
. .
1

1
1t dregionsareake)'rcsourcc
local and regtonal development policy. Peop e tn oca 1 1cs an .
. k'll d J' fi ations throuoh educatiOn,
given their potential ability to upgrade thc1r s 1 s an qual c b
..., C h 1993 Campbell et a/. I 998)
training and developn1ent (Bennett and Me os an ..
. a incomes and lrvmg stan-
Increasing the producti vity of labour ts central to mcrcasmb .. :-- d
. . . n increase the capabilities an
dards (Cypher and Dietz 2004). EducatiOn and trammg ca
1
. d to
. . , date ne'' techno ogtcs an
capacities of labour - or ' human capttal - to accommo .
1
omic compcti-
. I I I and regwna econ
mnovatc. Knowledge and skills are centra to oca
1
. and uponding
. . . t '\\ 1999). Dc\e opmg < e ' .
ttvencss and poltcy tnterventtons (Keep and le h h ol to the
I b
ess from t e sc
0
a our occurs throuah the formal cducatton pt oc
b
level, and through learning by doing in the workplace. . . d , ping and upgrading
t policy m e\ t=
0
The challenge for local and regionaJ dcvelopmcn . t t to\\ hich
I b
. . I . t'onstnthecxcn , .
a our IS that there are marked geographtca vat Ja
1
. , .
1
and thut
. . . . . 't ttOnS to de\ c op . .
m locahttes and regions are engaged tn mstt u .
1
., c1 educati on nu
I
. . . . . . , d anc -- d or tcrtwry- e
qua ficattons and skills. Parttctpatton tn a '
TIONS:
TS AND POLICIES
/NSTRUMEN
. . tor ,,ample, '' ith the Slo\ a"- Republi c
1
.. --
. 1 di-..tnburwn, c.;
1
)lttng
1
unt:' en rcgwna . , rolmcnt in tct1Hlf) or ad\ anced eductttton ,, ttl .. t lc
. I ,arwuon tn tn . I , 1 d
13
p-.c. r regJona
1
. ,
1
) \ 1o\ ing a'' a\ trom t 1e Ke) J.
:: . - . ofO. S(tgutc.; _.. ... .. , "Hl\tsu
cicrH of ,anatwn .
1
f the cconom\ dtscusscd tn C haptet 3, recent
1
,
1
Pon
. " dcmand-St(JC o . . . .
milnagmg t lt: d the local and rcgJOnal suppl) -stde of matlets ""d us
. . . ... have foe usc upon ha,.
tnttJall\ c.s
1
. r 'f\ cntions to shape lclbour dcrnand. Recent in 1 e
d
tecr dear o tn t: . (Jigcnou
tcndc to d, ,lopino wd upgradtng labour as a supply-side
hes focus upon t:\ t e- ' ... . . ource for
approac . .
1 1
,.tics and as ''ell as a potcntwl st1n1ulus to c
C\. i c. 'n ocn , ntrepre.
, -hi and ne\\ bujnc:,, .
m;ur P . d' t
11
cnt ,, tthin locdl and reg tonal labour nwrkcts often depends
J conom1c a
1
. . , upon
. . fl b . t td lpt to oncromg change m labour dcn1and a restructuring f'
rhe abtht) o a our o' { e -- . orces
.
1
ment lc\ cb skills and knowledge obsolete and requires
change 111 emp O) . . . . , ne,,
d
, tlb to be lcanlt contmuously. L1felong lcammg tl.
competence.. an . Hs
I t On
noing ktll de' clopment (Coffield 1999). Developmg and rad
approac 1 o E . . e- mg
. d. labour can rap into the undcruttltsed resources of workers who pos
m Jl1cnou c ' se&s
or unden alued and cannot contribute their full potential to economic
acth it) and gro'' th becau e their "-Ill are not in demand (Metcalf 1995). Besides not
being an a set in the gro\\ th process. underutilisation denies labour the dignity of paid
work. poses reproduction co t to ociety through \Vclfare transfer payments c1nd other
ocial cost . and renders indi\ idual , households and com1nunities vulnerable to poverty
and ocial exclu ion (Campbell et a!. 1998 ).
In neo-classical and. latterly. in endogenous gro\vth theory, labour is understood as
'human capital' (Becker J 962) - an a et in which investtnent can be made and returns
c.\pected. 'Human i another related tcnn used (Bennett and McCoshan 1993).
De\eloping and upgrading labour focuses on impro\ ing fonnal qualifications, skill levels
and \\Ork experience to the benefit of individuals and the broader local labour pool as
well a indi,idual organisation in contributing to local and regional economic activity
and gr0\\1h. The central aim is raising the capacity of individual s and groups to develop
new innoYations and technology to in1prove productivity. Local and regional
mstttut10ns occup)' a c t 1 1 d'
en ra roe m m 1genous approaches to developing and upgrading
from the le\ el of school s up to the gro\<v ing in1portance 0 r workforce interme-
dtancs - such as busine
ss a soc1at10ns, labour un1ons and other agencies - that operate

I
0.9
08
0.7
o.o
05
04
0.3
02
0.1
l
f
C3 (\) 0 -g t 5 0 -;)(/)
Q. &_ <{ u. fZ
Ci
z
Figure 51 R .
. egonal variations in
Source: Adapted from OECD (
20
enrolment in tertiary education by country, 200
1
Note: Coefficient of . . 05b: 146)
varrat1on st d
, u ents per 100 population.

MOBiLISiNG INDiGENous POTENTIAL
en and tnar"-et to develop ,, ork fo
hd\\ . c rcc and .
(Bennett and MeC 1 Benner 2003: (JJ\oth pro\ tde .support services
. ,,onnl employers tn the pnvatc, publtc and vo\unt ). In parttcular. local and
t . d
1
Ul) a ....
. an arttcu atmg local and tcgionl h.: mtcrprcted as critic
1
tn t1 d . '' ctnploymc t d a
local an regtonal dc\ clopmcnt poltc n cmands.
d
(M ) approaches a
I
bour market a J usttncnt artm and Morrison 2003) K . rc to promote
a bl' cy c
I
:Jiy-sidc oncntattons, pu tc and/or private prov . onccm demand- or
sup d . tston and the natur f . .
b
tween industry an government, tncluding cducati
1
. . . eo mtcrlmkagcs
c . . f
1
ona mstttuttons h h
d ustmcnt capab1ltty o oeal and regional labour k \\ tc shape the
a J . . mat ets. lmpro\ ed
1
b
. formation, for example, 1s a startmg point for underst .a a our market
10 . . anumg local and
1
arket functioning, enhanctng the atnount of publiclv '\
1
,
1
bl . reg10nallabour
n ' . . c . J '\at a e tnformation o th I 1
1
bour force, rcductng tnJormatton asym1netries idcntif . k' n e oca
a k'll bl f d 1 , Ytng 5 tlls gaps and rcvca1in
comparable s 1 s cap a e o re ep oyment (\ttcado\\
5 2001
) \ . < g
. d' e\;;ds analvsts and its
connectiOn wtth tn tgenous resources locally and rcgtOnall ft
. . y are o en used as part of
diagnostiC techniques to better understand labour market cha . _ " .
. . . . nge. xample :'>.J dctatls
such a fratnework and tts for SM t. de\ elopment in Gennany.
Oeveloptnent and upgradtng labour can ha\ e a broad ambit includt' h .
. . . . ng t c promotton
[ 111
of bus mess at .the. school level wJthm the public education system (Campbell
eta!. 1998). Ra1smg aspirations and levels of educational attainment as well as encour-
aging entrepreneurial ism as part of career development ad\ ice arc examples. Too much
business influence in schools may skew educational prionties. however. if students
become too narrowly trained in accordance with the of industry but without the
adaptive ability think broadly, critically or crcati\ ely about problems outstde the realm
of comtnercial usefulness (Rodriguez-Pose 1998). Furthem1ore. business mtcrcsts may
have an econotnic rationale but socially pen erse incentive to encourage educational
institutions to create an overabundance of educated in certain fields. This would
depress employee can1ings and intensify con1petition for jobs. After two decades
of school level entrepreneurship programmes in the United Kingdom. however. their
effectiveness is \veak (Greene 2002).
Strengthened further education systems have been sought to meet local and regional
demand for vocational or specia I ist education and training. across the spectrum from
general business studies to 1nore specialised technical apprenticeships and
McCoshan 1993 ). In the context of the 'knowledge economy'. the role htgher cduca-
. . . . . .
1
t , ei' ed constderablc recent
t10n and untYerstttcs m local and reg10nal de' c opmcnt
1
1as Jec .
. . . (K md 1999). rangmg
attention developing and upgrading labour tntttatt\ cs eep' .
1
. . l . o 1 and rcgtons, to t lC
from the need to retain graduates, particularly tn aggme
0
. . no
. d aerial educatton. tratnl 0
potential for advanced and postgraduate techntcal an manao
and . . . r rrammes to impro\ c the ... upply
lndtgenous approaches usc custotn1scd trammg prog d . n w
1111111
o locl
f k
'I . . i d b the market an arc co , o
o s 1 Is where they are not betng prov1c c Y . ... . , i ,
11
cj
11
n cht\)111C or
d
. ' target groups cxpt:r c.; c
an regtonal development. Such programmes ma)
1 1
ntl\ cs may to
. I . ldcr \\ orket s. Ill 1<
temporary unemployment 11ke \von1en. yout l,
01 0
. , , ki lb for cntry-
d
. c old rmsc '>
develop entirely new ski I I sets, readapt or
1110
l crh
1
1
ptoymcnt ttlfOllo . . . .
eve] work. or break the cycle of long-term uncn ..
11
t in
. . ., 03) Local govcmmc :-;
trammg and intennediate labour n1arkcts (Belt _o ...
172
Example 5.3
S AND POLICI =
INSTRUMENT -
P
etencies-based economies formation
The com ,. g G
t Pr'
se for SME tratntn , ermany
of en er
. .
1
l have been used C\ tensi \ <lS I neal and d , ,
,, anUllC" for S \ r C\
Truinmg II , ( rmctn Foundauon tor lntcrnattonal De\ L'lopnwnt .
' I .. lt .. It t . tuns
opmcnt tons
11
t; . . . lllll' cllkd the economtes form
1

..., .. c tnunrng p10gt
111
' 1 ton
'
a comptt; lUlst\ . . It to the ot loc
1
1 )' -tf
. . , (CTFE) progtamrnc. . ' v s
'
of cnkf1>ll"t; ..
1
k
11
l uiluirw. ,clf-anai) Sls and encouragement of enk,pris
. r 'ntr 'pn:m:una I
1
.... . . lng
thwug
1
L , t . L... ,en used 1n O\ countnes and \\ throuoh r
. 1 he provrammc l cl ll... . tOUr
bcha' wur. th' t lll<n\ it to ndapt and respond to local l:.ach of th
component-. ,l ' . . , . . .. 1 . , . . c
. . . . f ,.u11c1pttorv. Ph<t\C ont drct" ') 111 loca rcsrdcnts With cntreprc
modUle' I' IO((raCtl\ C till< ( ' .. . . ., ., .
. . h . I b, -..utted tor parunpatton Ill the progrclnHnc, \\r h lie at the same
ncunal mtcrc..,h '' o ma) t: .
1 . ..
11
nrnc t 11r c cs w1th local cultural norms and the
umc lctung t11c pwgt' . .
. 'nt Pln'c two .,,c..,sc\ the need') of groups 1 n the corntnuntty idcn
economiC em Jronmt: < ' . -
tlf1cd b) their cthnicity, age. tormcr ('CCUJXltJOn. educatiOnal background, the '\tZc of their
I
b
d t)n f'or t'lfl't'tctl truining in business de\ elopment. Jn the third phase
u"tnc-.,5 an -" - <
complementary intligcnou" rcsoun:c" are idcnti ficd by the progran11nc managers to assist
in the businc development programme, for example local government or other donor
agencic. familiar to local busmes-,es. In the final phase. candidates frotn the identified J oup
arc screened to select tho c people with the potential to contribute to
the local economic fabric. and on whom resources \\i ll be most effectively The
tk\tgner) and ad mint trators of the training programn1e have found it especially cffecuvc
for )mctll with one to ten 98 per cent of \Vhom claim that their
income and turnover by at least 30 per cent after going through the CEFE training.
The Cl.FI::. programme two strengths of a human resources development
programme. First. thl' degree of adaptability, as well as attention to local circumstances.
is a key detenmnant of programme \Ucccss. Second, human resources training is often best
deli\ ercd as pat1 of a larger bu!)incss support scheme in which entrepreneurs arc selected
who \\ill usc the new!\ .,cqu d k' ll 1 1 h'
. - u tre s t ( 1rect y wtt m thc1 r ex1stmg entcrpnses. In th1s
way. trammg can complctnctlt tl1 t d'
cxts mg tn tgcnous strengths of the local economy. As
we noted abo,c ho\\ C\ cr su h r
. , c programmes tocus upon those often n1ost able to help them-
seh {;s and not the much hard r t .. h . . . . ,
0
tndtvtduals and groups tn need of support.
Source: Fisher and Reuber (2000)
with high populations of recent imn . . .
ing pronrammes to
1
ltgt ant(\ may, for example, estab1 ish language tratn
... o . t.lprove access t 1 .
howe\ cr aboltt tt1e eft' .
0
emp oymcnt (VIeadows 2001 ). ext st.
' f'
. I ss o poltcv and bl' . . . 'd , I.
Wtt l low human c1t1ital t ,
1
pu 1c substdy to encourage tndJ Vt ua s
'
0
cnkr sd f-cm 1 . . . . . . . .
.md Stor(y 2004). P oymcnt. cspcctally tn low cnterpnse areas (Ac::,
\Vhile Kc\1n, .
r l:Sidll illtCt1l J)tS t ) ,
. t I, I' . l the l, l . h
etc
1
' l:: P
0
rcy ha, c rccciv, J
1
. . -side of the labour tnarkct throug
t.:l rc 1, . . .
tndtgcnous local and regional I, , . css attcntton recently, they arc an option for
example 1 l C\ dopmcnt F 1 r
pt OVt< e tcrnporarv s h.
1
. -mp oytnent n1aintcnancc schemes, tO
.. . u Sll tcs to com . . II
P<tmcs to keep workers cn1ploycd at fu
(
INDIGENOUS
0 TENT I A L
1
'\ ds until alternative ernploymcnt and tnin'
,,,age t.: , . . . . ' tng can be set
. ,
1
to workers who have been nn
1
,
1
up rather than making
. 173
-..ot: ''' l . . . , l c rel undant a d . k'
,111111oytncnt an<. tnacttvtty. By subsidisin th n ns tng their fall
1nto unt.: g c cost of l b
)l''tril y redundancy and cmp\ a our. these schemes
tcn1p< ' oymcnt level . ..
..
1
net works of support and expectation" of prof . s. matntammg the
soctcl C"iStonal conduct th t "

1
yccs in a workplace ( McQuatd 1996 ). <;uch prog . a tOrm among
cn1P o rammes connect w'th I
I t
ons to worker redundancy including a d . . .
1
so u ' . . . n 'etratnmg (Bosch 1992
A
rea-based tndtgcnous approaches to dcveloptng and . ).
upgradmg labour
1
labour (Marttn and Morri<;on 2003) 1 crritoriall b ocus upon
loca . ' Y ased employment t
c example, organtse agrcetncnts between local employers and
1
b pac s.
,or . f d' . . a our exchanges often
ortcd by pub ltc un tng, to oncnt recnutment tO\\ ards th
1 1 1

supp . e oca abour pool. This
. ulatcs local den1and and, tn the longer term can underpin a .
1
.
st 11n . . . ' spec1a tsed local labour
kct and ratsc asp1 rattans among local to participate d . .
mar ' tn e ucatton and tram-
. Once in ctnployn1ent access to further training and development . b
tng. . . . . can e supported
by local and rcgtonal More however. labour market interventions.
for example the New Deal employment substd) in the United Kingdom, arc often con-
nected to broader reforn1 of the welfare system and the targeted experiments with work-
fare, initi ati ves that link social policy to economic outcomes and promote supply-side
employabil ity' (Peck 2001; McQuaid eta/. 2005).
conclusion
Shaped by the conceptual understandings of 'de' elopment from below. grass-roots'
and ' botto1n-up' perspectives and endogenous grO\\ th from within localities and regions,
indigenous approaches contain inherent flexibility and adaptability allowing their
speci fie design to address particular local and regional The con.text-
scnsiti vity of indigenous developn1ent strategies in connectmg to l?cal and
assets and resources arc strengths but may require high degrees of poltcy adaptat.wn and
Jcarnino to tneet local and regional development need<;. Establishing new busmcsscs,
b . . . . d d 1 and upgrading labour neccs-
growing and sustam1ng cxtsttng busmesses an eve opmg ... . . .
. h 1 d ployed Capactty bwldtng
sitates detailed knovv1edge of the places tn whtc po tcy ts e . . .
1 1 t' h ffcctive coordmatwn and tntc-
and empowerment is integral too, part1cu ar Y or t c e . . . f
. , . . . . . . , i . 'l t by mstttuuons o
gratton of poltctcs w1th1n con1prchenstve (eve opmen . . h. multilevel
" rraphtcal scales wtt tn a
govermnent and governance workmg across bcog . d nd lonocrtenn
. . . I er-level but sustamc a e
system. Indigenous approaches may teqUJrc O\\ .
1
. t't
11

011
', fhe potential
. . b I I and rcgtona ms t u ..
fundmg to support long-term strategtes Y oca . cxtct-nlllv oriented
. . . I k. is of exogenous ot ' J
of tndtgenous approaches for connectmg tot lC tn( ... i . Ch pter 6.
. . t c addressee tn a .
approaches to local and regtonal de\ elopmcn ar S
1
trateoies arc often rda-
. . I .. drawbacks. uc 1' ' t" I
Indtgenous ar)proachcs arc not w tthout t lell . ,
110
micro, am
. tl\ c terms. grO\\
1
::: .
hvely slow to yield substantive rewards. In quanttt.a - ... f new Jobs in short t11nc
. . b t ntwl numbct.., o t
medJUm-stzed businesses tnay not create su s a
1
. t
1
'Y 15. of claimed cmploymcn
h tl e o ftcn ug
1
(.; 1 , 1
penods, certainly in con1panson w1t
1
, 111 t lC tl:.
. . t . IJ O\Ve\ er, ciS \\ C >I'C
creatiOn by new in\vard investtnent prOJ CC s. . . . sector mtght prove nH
. I mdtPcnous . . , ld
chapter, jobs created in the local and regJOna c . )ver timt' Dt!vcloptng dt
. . . ,
1111
cntal l
sustamablc tn economic. soctal and ern trol
AND POLICIES
INSTRUMENTS
'rERVENTIO'!S: . . , .. . " " . ..
I wd tasl... , SOJ11t.::ttn1t.::" in
. lom!-tcrm c .:;, ... - ... l'llhan . ,
ending labour a ....
1
-.ffcct through the outtlO\\ of the 11 led tn I
upg - . . d t brcun 'nun t.:: ... ' t l 1c qul
l
. b Jur mob !Itt) an c .
1
r de\ eloptnent tna) be ,
11
, ''
a l . all( t,; . d , \t tl
f --d from lm!gtng ' t'" t
1
m the e\ cloprnent tr lJl' 't ' e
I lt - . I\ tO C JCC ' ' , . . ' , t: Or\ Of
ntd pt!rhap::. lc s
1
t: '
1
,
1
to the ''d)'S m '' htch large t Dl l)tOJ, , a
' . for C\HlllP c II . . t . llla
localir' l1f rcgwn. .
1
nd tn a place. In qual itatt\ c
- 1 t , occupcl ' -. fll'\ th
implant ne'' fact
1
':--d r
11
ttlatc higher k\ cis of entrcprcneurialisrn and rats" ,,; e
o rcqwrc to s n , ._ . . . '- \.:uttca.
culture chan.:::-c. . 1 , (l to achtc\ c. DccH.ltng upon the qual it) of .
. . tions ma) . . . . . . . 'PCctfic
!tonal d . mcnt to tor policy ultcn cnt1on rntscs thornv
. . . f ndigenous e' c op J ques-
tonns o
1
...
1
. fa mcnts ,, hat types arc encouraged and what ronn
. h qUJrc 'a uc JUC . , & are
t at rc a . d _ and tore} 200-n. These k1nds ot dcveloprncnt dilcm
liscouragcd or '-=-note . . . 8 mas
< - . - h . the tn Chapter .
. re dbCU ed 1urt er tn f., . I .
a . t to de' clopmcnt ma) c\ en be e tectt\ e y closed-off 1n locart
An md1genous rou e 1
. h
1
1 an' di ccnublc and resources an1enable to de, clopme
and re!?:tons t at . . nt.
h d "'ndcnt upon e\ogenou approaches. As a place. tf the mam resourc
rcndenng t em cpt: "' . e
. d... . d cheap labour then de\ clopment opttons n1ay be somewhat limited
J) abun ant an , . .
. ett.tt\ c advantaoe m the manner of Porter s theory through the
Crcatmg comp . . . . . . t>
sophistication and , alue-added content of econorntc t.n the locallty and region
ma\ then pro,e a orne\\ hat challenging task. Upgradt ng mdtgenous economic struc-
faces the mO\ ing target of up ith the cumulative growth and developing
advantages of more prosperou localities and regions. Echoing the potential problems
of clu ter polic) and exogenous approaches discussed in the next chapter, the relative
merit of pecia1isation and di\ re1nain an issue for i ndigenow> development.
Economtc peciali ation can ) ield C\ten1al economies but may breed risk and depen-
dence upon a narrO\\ economic base. Oi\. ersificati on reduces reliance and spreads ri sk
but may not benefit from namic agglomeration economies. The slo\ver pace and more
incremental nature of indigenou de\ elopment may be more manageable and firmly
rooted in place but it is al o potentially less glan1orous and affords of the kinds
of spectacular ad\ances sometimes necessary to attract politi cal support. Overall. indige-
nous approaches may be necessary and hel pful but on their own they are not sufficient
for local and regional development. The next chapter addresses their foi l: exogenous or
external ly oriented approaches to development in localities and regions.
Further reading
On approache. . ... C 1 E
F
. s. sec 001\C, P. and :Vtorgan K ( 1998) The A nociational co
nomy: trtns. Regiom an/ f I
p T .
1
.' . t
11110
''
011011
Oxford: Oxford Uni versity Press: Crouch. C.. e
ngt ta. C. and \ o 1 k . , , . .
Ri.\(! or Demise?
0
. . c O\\ d .( cd (200 1) Local Production Svstem s 111 Ew ope.
and L nl\ Press: Sti:i hr. W. B. ( cd.) ( 1990) Global
I!.urope. London r
1
U /. : es /01 Econonuc RegeneratJOII 111 Contempm al)
. 1c nt tcd r\ tt
0
. U' .
or a revJcw of th . ' I ns ntvcrstt) \t1anscll
. c \.:nt rcprcn , t 1 d
llc>n: entreprencurshi . 1tp ltL' raturc. sec Acs, Z. and Storey, D. (2004) ' lntro uc
On context-specific ,economi c development ', Regional Studies 38(8): 87 1 877
l11'nt i11 a (i fohu! t . .. cc Storpcr. \1. ( 1997) The Regional World Territorial Develop-
'
.connm) l o I .
or a review of S',11= ... Ill on: (JUt !ford.

1
" uppon 1 I
/;conomic., and Polin Ord Icy, sec An11strong. H. and Taylor. J. (2000) Regwna
.. l: I1J. Oxford: Blackwell.
,
Introduction
Th
e fortunes of local and regional economtcs arc crutiall\' de d .
< pen ent upon thc1r
ab
ilities to attract and embed exogenous In practice thts h ft
. . as o en meant
attempts to attract the tnvestm.ent of corporations and to exploit their poten-
tial benefits for local and regtonal econon11es. Thi') chapter describes the growth of the
TNCs and their changing form, especially the emergence of global production networks
and the policies and instruments seeking to attract and embed FDI for local and regional
development. It also charts the n1ore recent concern wtth attracting particular occupa-
tional groups and 'creati\ e professional s'. The dectsions of Ti\Cs to invest. reinvest or
direst, and the phenomenon of territorial competitiOn. have the power to shape local
and regional deYelopment and to determine geographical patterns of prosperity and
disadvantage.
The ri se of TNCs \vas an important feature of the second half of the twentieth century.
TNCs haYe been described as the n1ov ers and shapers of the global economy (Dicken
2003). Local and regional development agencies ha\e at various times placed a great
deal of effort in attracting 1nobile in' estors, cspeciall) in manufacturing, through local
and regional policy (e.g. Atn in et a!. 1994 ). Traditionally, have been.' icwed as
providers of, often, large nun1bers of jobs. especially for disadvantaged \1orc
d h 1 . b a1ers of ne\\ techno log}. tnnO\ a-
recently, researchers have emphas1se t etr ro c as e .
. . . .
1 1
l' Thus the decisions of f\C s
ttve manaaen1ent pract1ces and st1muh to oca supp 1ers. .
b f 1 cal and regional cconomtc'->.
can have a great bearing on the de\ eloptnent prospects o
0
. h,
fi m in\ estmcnts b} T C "' t t,;
As well as the potentially positive benefits accnung ro . .
1
, , ,
fi
f' m local M\ c
sudden withdrawal of large externall y owned rms
10
' her sungcst
. . . . d. , bcJO\\, some rcsearc "' '" =
devastatmg soc1al and econotntc effects. As "'e Jscuss ... f 'branch plant
h
, . I 'ld to the cmcrgcnct: o
t at an over-rei iance on TNC tnvestment can c, "" . . . r, shaped bv
f localities and regwns ci t: ..
economics, where the developn1ent prospects
0
. . . ,..d Chapter 3. "ith
h
. . . . . f labour m
t etr place in the hierarchical ' spattal dt viston .
1995
) \ h)re bnx1dly,
TN
. . . ' II d t' ncl obs (Masse) . . .
Cs providtng at best only setnt-ski c rou
1
. ocr that huvt
h
mcntatot s to Sllcot:
t e growing po\ver of TNCs has led some com . , .. l ,,hen in' c"tmcnt
b
. d' t ' nninmgwhcrt:an'
ecome more po\verful than governtncnts
111
c c . d --tailed tn '
tak
. s re 1994). As \\C t: '
es place in the economy (Hyrner 1972, trang . f' , plovmcnt, wealth elm
. . s a prO\ !dcr o t,;ffi .,
and 5, despite the resurgence of the small finn
J76 . .
ND POLIC I ES
INSTRUMENTS A
INTER\ NTIONS .
I
. . )J' 'll dC\ clopmcnt. the e\ oh mg f (' continttl'\ ll) f
. f
1
1 1 t'!.! H " <.
0111

rhc
0
oca ;
1
c ( 1994: . \ min and 1995 h). 11late
the econonuc land:- 'p , -
11
, the C\ tdcncc the tmpact of r (
111
, " .
. h --r to t:'-arnt t: .
1 ht. c aptt: . , , fhcorctr cal ctnd cmprncal de\ clopn1cnh ht 111
d "'oional economrcs. . 've altere I
JocJI an rc: .= t ,
11
contri bution of f to l ocal and rcgtonal <.tc, ,
1
<
about the potcn '' . t: opme
. . , . in Chapter 2. quest tons o t "hat t\. pe of
1
nt.
I ... -. a me wnc. \\ t: . . ... ocal and
.-\t t lt: ' . i fH \\horn han :- dogged dbcusstons about the rol e )f
"t' nal dt:Yelopmcnt cll1( ( . , .. . l 111\\'ard
r<"IO . a<> ' For tn:-tJncc. 1 '\C lm cstmcnts Ill lagging regions h
mestment Ill lnc-c rng .... . . b .fi II . . a\e 1
... d r r'htions in some rcgtons ) spcct ca y scckmg to tar)
helped to reshape gt n t: t; < unu ed

1
.
1
, ) b )Uf The impctcf'.. of such de\ clopn1cnts ha, c proved contro\ c .
Pools of ema t: <1 t . . c . , rstal:
d I
, tunc the\ can both proYtde JObs 101 \\ mncn who may ha\ e b
at one an t te amc . . . . . een
.
1
.. 1 d ' d t'P)tn the worktorcc. while at the .. arne t1n1c confintng the
11
to ' I
prC\ IOU' ) C'\C U t: " _ , . ., _ 0\\'.
.
1
. ron (\ la sc \ 199) : Braunst{;Jn 200.5). In the past, te
1
ded
lrllc( occupa r .. . . . . . to
a largel) crittcJI , iC\\ of the impdcts of torc1gn dtrect cstlnent. on hos econ.
. that the\ ocncratcd dependent developn1ent by creatmo cathedral
onues. ugg c . c . o s
in the desert'. \\ hich \\ere on I) ' 'cal-.. I) embedded tn the local economy (e.g. A min
1 ORS). The e type of critici::-.m continue to be levelled at some TNC investments in
lagging region . but late some researcher ha\ e suggested that the changing nat ure of
T\ C thrO\\ up a different range of local and regional development possibilities (Amin
et a/. 1994; Henderson eta/. 2002). This Jed to efforts to discover ways of embed-
ding' T\'C in ho t economies often through local and regional development policies.
At the arne time. the grO\\ ing tradability of ervices. along \Vith tnore efficient S)stems
of information and communication technologies, has led to the emergence of mobile
.. en ice in' e tment (\lar haiJ and \\ ood 1995 ). Fi nally, the aJi eged shi ft to a knO\\ ledge
'"'
cconom) ha rai ed ne\\ challenge. for local and regional development and attracting
and embedding e'\ogcnou re ource . including ne\\ technologies and managerial skills.
Lnder this . cenario. crucial to local and regional development, is the attract JOn of the
specific occupations and professional groups that n1ake up the so-called "creati\ e class'
that underpin the kno\\ ledge economy (Florida 2002b ).
The economic role of TNCs
There "a a growth in for:- a d .
, .. d . ctbn Ircct lt1\ estment from the end of the 1960s. wh1ch accel-
ct cltC tn the 1980. and 1990 . . ... .
export.. f h.
1
. . s (Ft gun.: 6.1 ). T\Cs account for 1\\ o-thirds of global
" o w tc 1 a sto- ntfic h
mcnts of good. ant_ s arc ts Intra-firm trade (G7\CT AD 2004 ). Thus, moYe-
.... . . en tees and 10, est t .
1
. . 1
and rcc.ional ec . rncn Wll1ln can haYe large tmpacts on Joca
"" onomtes. T\Cs mak d. .
or throunh e. f < c trcct tn\cstments either by greenfield in\ estmenis
.::;, ::, s 0 mcruer 'lnd ac . . . .
two modes of ent , - :::- ' qutsttton The relative importance of these
f) uno local and rc ' . . .
place . but both have th . gtonal econom1es \aries over time and between
c puteruta) t t 1
The overall fo FDI o lC p reshape economics.
it h b h "" r growth obscure 1 hi II '
a ecn t c ca:>e that dc\elop , . a 1tg Y uneYen geography. Ht stonca }
outward FDJ (Ruic.rok and countnes ha\ e dominated fto\vs of both inward and
Tl .... van fuld -
lump:sun 1999). Indeed, the U . " , et 199): Boyer and Drache I 996: Hirst and
nttt:d States a d u h -
n nJted Kingdorn have don1inated t e)e
ATTRACT I NG AND EMBEDDI NG
-
0
EXOGE Nous RESOURCES

1ooooooo

-
aoooooo
0 0 0 0 0
6000000
0
4000000
0 .. 0 0
0 0 0
2000000
..
. .
0 .L-1- 9-7-0
1990 1995
2000 2001
FDI inf lows (mill ions of dollars}
0 FDI outflows (mill ions of dollars)
0 FDI inward stock (millions of dollars)
0 FDI outward stock (millions of dollars)
Figure 6.1 Global FDI indicators
Source: Adapted from UNCTAD FDI Database
2002 2003
although the last t\vo decades of the twentieth century saw a sharp relative growth
in outward FDI from other countries, notably Gem1any. France and Japan. Japan. espe-
cially, made an in1p01tant contribution to the rapid growth of overan FDI in the late
1980s and 1990s reftecti ng the ' endaka' phenomenon of the appreciating Yen. This
period also sa\v the beginning of outward FDI frmn developing and newly industriaHscd
countries. These fto-vvs \Vere dominated b) a handful of countries, notably, before 1997.
Hong along \Vith Singapore, Tat\\ an. South Korea. Malaysiat Brazil and.
recently, China. Most FDI, perhaps contrary to the popular conception. as well as ong-
. . . . d 1 d tries Thus overall. FDI has
matmg m developed countnes, goes to eve ope coun
. . 1 d 1 nt in the de' eloped world played a bigger role 1n shap1ng Jocat and reg1ona eve opme
. . . d S d Europe attract most FD l. but
than tt has tn the devcloptng world. The Untte tates an
1 l r tl FDl itself These trends partY
Japan which invests heavily abroad attracts relattve Y lt e . U . d
b
. J nd trade deficn IO the mtc
account for the large trade surplus accmnulated ) apan a . n
. . . d 1 990s. Among deYcloptng cou -
States sustained by overseas 1nvestors tn the 1980s an . rt t r"cip-
. , 1 entun as an tmpo an \.:
tnes. though, China etnerged at the end of the t\\ entiet
1
c d t the tum of the
. . F D 1 ft
0
,,-s decrease a
tent of FDI (Example 6.1 ). 0Yerall. howe, eJ uNCTAD 2004 ).
. d f FDI orowth siO\\ Cd ( 1
twenty-first century and the long peno o
0
f FDI varv between sectors .
As well as being geographically uneven,
0
. thr intcmation-
H. . . . h rimar'- SCCtoL t C e . h
tstoncally, FDI \vas very Important tn t e P ; . d <Js produdion, wluc
I. . I . 1ina and otl an .
a sed character of sectors such as tnJncra
0111
e .. L-.d the capital
h . Here FDI provtut; I
ave been important in developing counrncs. d c"pccially. tht ;lrgc
. 0 I f m the 1960s an ' :-; . . :
to explou natural resources. The gro\vth ofF ro . ,
1
. "at ion of manufactuttng
d h 1tctnauona h
Increase in the late 1980s and 1990s reftcctc t c n , , t , Espe ia 11 ) from t
. d Nl&J\ act t\ t )
activities, both through greenfield investment. an
I - .
177
-
178;
. . .
INSTRUMENTS AND POLICIES
INTER V_E!_T I 0 \1 S :

Example 6.1
New locations for FDI
made tt a for FDL as this .
11
, .
1
.
. nt mdu trial nscendancy ha
Chllla rcce
( d YSI . f"
ro
111
rhc OtCD shov.s:
.
1
orJd' largest of foreign direct in\ estmcm (FD
Chma became t 1e '' . . . . . I)
. . ,
00
? y ct whtle thts t'\ unprcsst\ c for a countJy that b
for rhc first nmc tn ... - . . . . egan
. t' ian in' estmcnt only rt;cently, thts J mnp IS an11d declining FDI
reacccptmg Oft; :; . . .
. tl
1
rhcr countncs. In ICD11::-. of l DI per captta, Chtna stll l ranks relative!
Jll 0\\5 0 0 . )'
b h tl
.IJ been un1asscd b\ c, cral OLCD rnembcr countncs Accordt'
lo\\ ut as r ng
tO OECD tati in 2000 the L nited States. Germany and France, among
other . alJ reccJ\ cd more in torctgn in' cstn1cnt than China s L S$38.4 bi Ilion. In
2002
. ho\\ C\ er. FDI to mo-r OECD nations fell sharply, particularly in the US.
\tcanwhile. FDI mto Chma ro c to a record LS$52. 7 bi Ilion. Nearl y half of
realised FDJ tn China is li ted as having originated in Hong Kono
0'
China. though thi an uncounted amount of FDJ frotn the overseas
Chinese dia pora. e Taipei and from \vithin China itseJ( via 'round-
tripping' in Hong Kong to take ad\antage of incentives offered to non-
mainland im estors. In terms of investment from OECD countries, China's
ranking has recently fallen. In 1995. China was in second place, but by 2000 it
had dropped to fourth. Also. recall ing the country's enormous population. FDI
inflO\\S in per capita remain far lower in China than in al1 OECD member
except Turkey. The composition of Chinese FDI inflows
1
s also
different: . ince the most of the FDI among OECD countries has been
due to merger;) and acquisitions. \\ hich is neg) igible in China's FD l inflows.
Source: 'China ahead in foreign direct investment'.
OECD Observer, no. 23 7, May 2003
1980s these developments ,,. d . . .
. ere nvcn by the ltberahsation of trade policies and the
emergence of tradmg blocs such . . h .
and f\AFTA . . as t e Smgle European Market in the European Union
s \\ere espec1ally .
technology secto . ( tmportant tn a number of key sectors. notably h1gh
rs e.g. pharmacc t 1 d
no logy industries) th , . u .tca s an mformat ion and comn1unication tech-
, c automotl\e md d
tobacco. soft drink . d us try an mass production industries such as
an processed fl d u , . .
has been a declin fl
00
V\ tthm de\ eloped countnes espccwlly. there
. e
111
0\\ s of FDI i . . ..
whtch has had sionifi . . . n lO\\ er-cost. lo\\er-sk i 11 manufacturing acttvtttes,
" . o cant unphcat ions . .
rccc:ntly. howe\ er tl ,
1
or son1c local and reg tonal econom1es. :Vfore
, . , lcrc las been
espectally in financial .. a marked growth in FDI in the sen' icc sector,
the ) , . Cl' tees. market i . . .
gcnerttl gro\\ th of . . . mg anc dtstnbutton and tcleservtccs reftccnng
. . sen tees tn tl , . ' .
communtcatJon tech nolo l .... , .1c economy and the growth of in formatt on and
Tl'b. gles( ICTs)t tl . ..
. 11s net overview of trend . . n leu 111arkcttng and provision (UNCT AD 2004).
tmpot1ancc B 1 s shows that fl n
ut t
1
C ability of 1 ..
1
. . ows of mward investtnent have grO\\ n
1
oca lt tes a d . I

11
teglons to attract and embed FDI is \artab e
ATTRACTING AND EM
BEDDING
, , = - EXOGENous RESOURCES
I
. ha.., 1mportant tmphcatton::, 1or the pros
-
_179
lnd t ll.., . . . for local .
'
1
icy. ,, htch arc dcscnbed below. llo\\ eve th and regtonal devel
nnd po . fl . r, e ttnpact of FD opment
. ,hi) unC\ en. often re ccttng the different nat'
1
. . I on ho t econ .
15 htg f .
1
. tona ongms a d . omtes
.a
1
. crsc sectors o parttcu ar and d't'" n vanous destinat
anu t '' l ercnt mod f . Jon
. This '; uggests \-ve should be wary about tl es o entry tnto host ec
0
mtcs. . 1c value of . on-
. ct of FDI on local and regtonal economics lt . general clatms about th
,mpa . POtnts to the e
C
aches to understandtng FDI and its local and . . . need lor theoretical
appr ' . .
1
egtonal tmp .
e
of moti vattons, pract1ces and outcomes act \\ htch allow for a
rang
The theory of the TNC
The theory of transnational corporations has C\ olved over f f .
. . . tme. o ten rcfiectmg att
to explain sht fts In the pract1ces of M Cs. In the 1960s St h H empb
. ' ep en ymer was perha
the first to develop a v1ew of the 1ntemattonal economy that we t b p.
. . n eyond the
sical trade theory t ntroduced m Chapter 3 by focusing on the rol f h fi .
. , e o t e rm and tts
organi satt on (Hymer 1979). Hymer s work pro\ed both seminal and f: . h d .
. . . ar stg te , antic-
ipating many themes In the debate about globalJsat10n that developed
1 years atcr. accu-
rately predicting the growth of a globally integrated economy in which TNCs would
play a central role. Hymer's theory attempted to explain the large increase in us outward
FDI that occurred from the 1960s onwards. He attributed this growth to the emergence
of the large, multidivisional fim1 and in1provcd communications technology on the one
hand. and the gro\\'th of European and Japanese competition on the other. For Hymer,
the main motivation for finns to internationalisc was to gain better access to foreign
markets. A \vave of US investn1ent into Europe was a notable feature of this period,
although Japan rcn1ained blocked to foreign in\ estment. with Hymer ( 1972: 1 22)
predicting it \VOU ld remain a source of tension to oligoplistic equilibrium'.
Hymer' s focus on the firm and its organisation was a breakthrough in the the01y of
the multinational enterpri se. As we saw in the product life cycle theory in Chapter l a
further clctnent of theory \\'as provided by Vernon ( 1966 ), \\ ho emphasised the
tance of technological change in the internationalisation process. Again, attempting to
develop a theory of the international isation of US industry, Vernon argued that finns
were likely to introduce new products in their home market. The stimulus to product
t l U 'ted States As
mnovat10n was strong in a hi gh incotne econon1y suc11 as t 1e m
d
} fi t instance by
seas demand for products developed this \\ ould be serve m t lC rs
b
. d d d fim1s tended to set
ut. as products ' matured' and their productiOn \\as stan ar tsc '. . .
d d tributwn or to gam
up plants overseas in order ei ther to reduce production an IS
1
.
1
..
. uld be locatct m ot lCI
better access to markets. In the fi rst instance these plants \\
0
. .
1
f w-
h [! h roclucts tn questwn.
0
tgh-mcon1c countries. where demand would be hJgh or t e P
1
. ts in devel-
. fi r e likely to open p dll
ever, as the product became tnore standardtsed, mls \\ er .
1
of
. . . f innovatton, t lC c . .
opmg countries. The emphasis here was on 'the ttmtng
0
. . fi . tndc
. t m m ucnung ' t
economtes, and the roles of ignorance and unccrtam Y
(Vernon 1966: 190 ). . I d.,.. v together a nutnbcr
J h h orv whtc 1 rc:\ ..., .
0
n Dunning ( 1988) developed an cclccttc t c fi lwosc to engage m
or . i' owhv rm::;c
tnstghts to develop a framc\vork for under tan( "
:aso ,
. .
JNTERVEi\ T:O"i S
POLI CI ES
I NSTRUMENTS
. l"nll to approach. there arc thrcL' fcatn.
i tion. I 1\:, ot f
. t rnatJl)n.ll pwc uc . l odul:tion. F ftrm' O\\ ner, htt) t lf11h
H1 l: . ltcrnnnona pt '<lnt t ,
I
')( fll iT,H!t' If) II I \\htch allo\\ then1 bcucr acce
t l :: - or sea c t: ss to fln
nonbh .ld' anw_ . , tr lll"fcr b 't" ccn locclt ( 0 ) Second th . 111lt(
- l \hi h thC) ' .. . . ' . .,. ' L)
or tcchnolog) \ .. , t .... uch ""markets or (L). l tnall\, tn
1
,. to
!> t h.: 1al, .
c"-rlott locafl()fl , t . , to mtcrnnli sL' (0 <l Ctt\ tn order to rcdut:,
1
c 01
. rkch <.: 100.)L , le unce
mtpcrtcl't m,t
1
, , t DunnllH! ( calkd th approach the eel , , . . r.
. f . t 'mattotHl lt<.:tl\ t ) . ... LCtlc Par
tninttcs o
10
t: ,
11
,
1
it the 01.1 appnMch (sec abo 1 OC\\ cndahl 200
1
\ l , .. a.
di Qm and hen l; l.t , cCann
d \ lu hmbt 2004). d 1 1 1
an t< .. . \' ' non and Dunntng has pro\e r1t g 1 y tnflucntial in lh
The ,,ork of H)tllt:L t:r . , .
1
.. , c \tudv
. .
1
b, , HI e tt !-Pd" ned a " tdt: range of rcseat ch on tntc
0
.
f T\ C actJ\ Jt\. pan > attonal
o
1
b . s "' the o rO\\ th of has becotne central to broader
bu JOt' c1 nd part ) , . e ates
. d toe 11 and rcg1on(ll de\ clopment ( fot re\ tev. s sec Ha"ler
199 about an ' .... . . . . J 7;
' ...
1 199
l) Dtckcn ). Although pnnctpally drn en by a destrc to explam th
Heldr: a . . . e
. . . f. fi the e cia theoretical trcatn1ents all had geographtcal 1mpllcat
actl\ttle o t111 . .
l the'
' implied that the local and regtonal tmpact of FDI would create a hle
In genera . . . . . . r-
an;h) of and that withtn h1erarchy regtons were likely to be
confined to ubordmate role::. m the econon1y. In the slowdown of growth in
the ad\ anced ,, orld tiom the end of the 1970s, it \vas assumed, \VOuld force the dc\'el
opment of a nc\\ international dh i ion of This \Vould n1ean that 'th sun i\'al
of more and more companie" can only be assured through the relocation or produc-
tion to nc\\ \\here labour-po'A er is cheap to buy. abundant 1nd well-
di ciplincd: in . hort. through the international reorganisation of production' (Frobel
et al. 1980: 15: ee abo e} 1995). Hymer, for instance, predicted that:
a regime of \ orth Atlantic \ttuJtinational Corporations would tend to produce
a hierarchical di' ision of labor benvcen geographical regions conesponding
to the \ertical di\i ion of labor wi thi n the fi rm. It \VOuld tend to centrali le
deci. ion-making occupations in a few key cities in the advanced countries,
surrounded by a number of regional sub-capitals, and confi ne the rest of the
world to IO\Yer le' cls of acti \ ity and income. i .c., to the status of tO\\ ns and
village in a new Imperial system. IncOtnc. status, authority and consumption
would radiate from these centers along a declining curve. and the
cxl sttng pattem of lncq . l't d d
ua 1 Y an ependcncy \vould be perpetuated.
(Hymer 1972: 114)
Early wa, cs of inte f 1
. . . . . ma tona mvc. tment tended to focus on secondary manufacture
wtth final asse bl . . . .
fact . ,
1
. m } operattons. Market stzc and cost factors were Important
01
tn t 1c attract ton of F D 1 d . lh
organised
0
unng th1s period \-\.. ith multidivi sional firms typtca
.., n a geographical mark t b' . . . . 1 t rere
often dependent '" . . c asts. In addltton, many of these branch p an s "
or matenal and t h . d had
vcn little aut . ec ntcal mputs from their parent compames an I
' onomy. \\Jth ccntr 1 d h' . 1 f thc
dav. In thi s per . . a tse tcrarclHcal managen1ent control the on cr
0
. spcctt vc, the inten t' I. . . local
and regional ceo
1
.
1
a tona tsatton of production would restnct some
l
. t omlcs to the rol f ' b d b come
leav1ly dependent d . . e
0
ranch plants econo1nies' which coul c f
on ectstons In' b . ent o
a c Y externally controlled finns (Govet nrn
ATTRACT I NG AND EMBED
DING EXOGENOus
. RESOURCES
,
1
tJ72: Firn l 19X2 ). Such wo . . h
. 181
- - - -
{ HHid,t . . rnes <tve been r . .
I
1
')K5 ) and have also been rat sed 10 relation t
1
. at sed repeatedly (
1
\t1111l o t 1e tmpact f . e.g.
1
trll ,111<.1 Lastcrn (e.g Cirabhcr 1994 Ra .
0
mobtle investmc t
Hl ('en ' < , ' tnnte and Hard \9 n
l
1

1
ck 2004). Y 96:Sokoi200l
p,' '' d .
I , common instrUtncnt to attract FDl has b
one . . ,.. . cen the export . .
/)
crcatton of EPZs was wtdesprcad in the lo : Ptoccssmg zone
(
I P . W- and tntdd\
t' n A
111
eri ca, the Canbbean, Asta and to a le'ccr Cmcomc countries
L ., 1 ' extent Af
111
' d Their introduction generall y signalled the beginr . f. from the 1970s
onwar . ,.
110
g o a awa f
b
tution strategtes. EPZs are advocated by the \Vorld B k Y rom tmport
su stt . . . , . . an (1992) as
. ationallstng developt ng econom1c5 and st11nulating the d
1
a means of
1ntern . . . . eve opmcnt of lo., l d
EPZs typi call y tnvolve the provtston ot financ ial inccmi I ca m us-
try. . . \ cs to attract FDI includin'
, exemptions. duty-free export and 1mport and free repatriatio f fi ' g
tax ' . d . n o pro ts, the provi-
. of mfrastructure an exemptlon of labour laws. Despite th . .
s1on . e1r populanty many
S
tions have been asked about the effecttvencss of EP ls (Dunning
2000
) E .
que . . ... xpenenccs
.-th EPZs have been dcctdedly tntxed. There arc generally fC\'' e.
1
f
\\ 1 . . xamp es o EPZs
contributing to fon11at1on and the ?e' of linkages with local industry. Even
where these obj eCtives have been reahsed. the offer of low-cost labour, gener-
ous concessions and enclaves \Vtth modern facilities have not always outweighed
their costs, for instance in terms of foregone go\crnment revenue, or declining labour
standards. The result is that the performance of EP Ls has often been poor (Jauch 2002).
The changing nature of TNCs: towards global
production networks?
During the 1990s. however, researchers noticed changes in the nature of the branch plant
econon
1
y (e.g. Amin eta/. 1994). Partl y refl ecting shifts in corporate organisation which
saw product-based structures replace geographical tnarket-based structures. Overseas
plants began to assume responsibility for world product mandates ('vvPtv1) or
product tnandates (CPM) signi fying an evol utionary upgrading of pl ants over ttme and
. . . . .
1
h t
1
n spati al di\ isions of labour.
holdmg out the poss1b1 hty of rcgtons a tenng t etr post tOn .
. . . . . . II . t . duce standard products wtth
Foretgn manufactunng untts that were mttla y set up o pt o .
. . h 1 anagerial and marketmg
semi-skilled labour in tin1e could acqutre thetr O\\n tee mea , m, . . . .
, . [! . tine techntcal act!\ ttl es -
expertise. Engineering capabilities acqutred to per orm rou d ld
. . . dividual buyer nee s cou
servtce, tnaintenance and custotnt satt on of products to
111
T\C affili ate
. . ' t . s observed that some
evolve mto R&D proper. Similarly, over ttme
1
\\a . wmv thus
. . h from theIr host ccot ..
mcreased the an1out1t and range of the1r pure . R, chers mooted a
. . . 1 mtc tmpact. csear .
mcreastng their positive local and regtona econo .
1
, t with enhanced
. , d crfonnancc P an
5
potcntta1 transition fron1 'branch plants to war s P . .
1
ment (J\min et a/ .
d 1
I d rcgwnal de\ c op .
an potentially positive implications for oca an . . . . of these tor
19
. . f 1 nnpltcatwns
94; Ptke 1998). Table 6.1 summanscs the potcn ,
1
ment agcncie. both
I I I d eownal de' t: op t
oea and regional development. Loca an r b
1
. . upport in order
0
. I tgh po tc\ ') .
responded to and fomented these developments t 1rot ____ u . trc. rcncurial ot
ma . . . f FDI B . supporttnb en p . ll ' ttnct
Xtmtse the developn1ent potential o )
1
.. 1 a(rcncn:s con t cl '
I 1 c. vcstmcnl. out
oca affihates in the intra-fim1 cotnpetttlOn ,or
10
Ta ble 6.1 Dimensions of plant type and local and regional de velopment Implications
'Branc/1 Plrmt
. - .
-------- ---- - -
Ext ernal ownershi p and control; s t r uc t urecl pcy;it 1on mel
constmincd autonomy; truncated ;mcf 11.111 ow fum:t tnn.11
Role and autonomy
' l't tlom lrlnc c '/Nntw01 kl' cl I.Jr rJnc,h Pldrlt'
Labour process
Labour-managen1ent
relations
Labour market
strategies
structure involvccJ in part production .tndj or
assembly; cloned <lllcf vvrt tc:rtlly llllt..!gr;-tt<.>cf w ith
limited nocj cs capabl e of oxt ernCJ l ll nk<-tgl ((' .g.
suppliers, technology) ; pol1cy
via automati c grant s to broe1cJ1 y cl C:Jr o.Js.
Labour-intcns1vc. semi - and unskil led ' routini sed' and
specifi c within refined techni cal d1v1sion of labour;
high vol ume production of low to mec11um technology products;
standardi sed process t echnology; short term, task spec1fi c,
on-t he-Job training integrated with producti on.
Organi sed and unionised labour; job classificati ons. t ask
assignments and work/ supervi sion rules linked t o seniority-
based pay scales; formalised and coll ective negoti ation and
bargaining tied to employment contract; personnel
management with admini st rative focus.
Employees considered interchangeabl e, repl aceable and in
need of constant superv1s1on; limit ed screening and high
labour t urnover and absenteeism; reliance on external labour
market .
1 xtornal owrHml ll p ""<J hut passibl<' enhunc<! d strut<Jgic
.mu operdtrng :)utonorny well as respon:.;ibllity tor
pctforttlt.tnco inc;renscd within a hierarchical
wi<Jer functional involved i n full
pr oduttron tilted towards rnanufacturing rather than solely
.. $ole capacity with prod,act (range), division or market
n1nnclat e at tile of increased
nodfs C;'l pable of linkage (e.g. R&D wiU', t echnology support
llurnr.1n resources with training); st ate oohcy support for
est abl ishment on selective and regui<::Jt<:d basis (e.g. job
crcat 1on, locdl content).
Capital and technology intensive, semi- and skilled work with
Increased need for diagnostic and cognitive c;kills;
JOb tasks and mdivldualjteam respon&ibility for performance:
low to h1gh technology and low to high volume production
fl exibi l ity; flexible and re programmable process technology;
longer term, coordinated With investment, on- and off-the-job
tram mg.
Busmess un1onism; reduct1on and streamlining of grading, job
titles and mentocrati c salary structure; shift to company-based
non (traditional ) un1on arenas, Individualised negoHation and
bargarnmg t1ed to 'enabling agreements; human resource
management techn1ques.
Rigorous scrutiny and increased selectivity in recruitment:
employees as human needing investment;
teamworking to reduce labour turnover and identify employee
with the' goals of the company; development of core internal
-------------------------------- -
l abour marl<ct and penpllcral (part-t ime, temporary) segrnents.
6.1 continued 'Performance/ Networked Branch Plant'
'Branch Plant'
Supplier linkages
Local economic
development
implicat ions
Limited since integrat ion with broader corporate structures of
production and supply chains; intra-firm linkages substituted
for local t ies; limited local supply chain knowl edge and
greater awareness of potential suppli ers in headquarters
region.
Outsourci ng increase with JIT and synchronous suppliers:
increased potential for local procurement and suppl ier
agglomeration; first and second t1er supply chain management ;
increased global sourcing and partnership relations; growth in
dependence in the local supply network; geographically
distributed product1on networks and JIT operated over (inter-)
nat1onal distances.
owned and cont rolled plants with limited decision- New concepts of externally owned and cont rolled plant with
maktng powers locally (' dependent development' . 'branch increased decisionmaking autonomy for strategic and
plant economy') vulnerable to closure or relocation operational issues, more rooted and anchored in the local
(' footl oose. runaway industries . 'hyper-mobile capital' ); economy ('embedded firm'), higher levels of technology and
llmt ed growth rat es in employment and output; low technology skills, higher innovative potential. more local linkages and
and skill s Cscrewdnver plants' ); f ew local linkages ('enclave increased technology transfer through research and .
development', 'dual economy'. ' industriali sation without technological development functions: supplier links upgradmg
growth' . 'cathedrals in the desert '); diversified industries not process technology improvement and partnership development
buil ding upon or modernismg exi sting regional industrial with suppliers; potential for the plant to be a propulsive local.
st rengths; lrmited innovation potenti al and technology transfer growth pole. for local econornic
--- ------ from ded1cated productron processes and suppliers. and capable of setting in train sustainable development
Source: Pi ke 886 - 88 7)
184 -- ...
INTERVENTIONS: INSTRUMENTS AND POLICIES
additional re ources that could contrib t, 1
b . . u c to ocal and .
' a JStmg the de\ clopmcnt of local . u lie regional de, cl
1990: Amin el a/. 199-.1: Youno eta/ 19p9p4) r nct\\orks and R&l) OPfllent, t()r
F . o . . <lrt . . tnst
. or orne wnters thcoc changes "cr, II I tflcs (I I lk ante
tran fonnation in the world cc; . a closcl) connected ' anson
non1;. and
lfCCt
A e ' ''nt,
n Important shift since the 1970 . . . crural
economv Tl
1
1
<l mo, c fro . .
.! l1 g obal CCOllOln) h" , th m clll lnfCtl1'\ f
p u rcc '' 1onai
trst. mdu trie incrca>ingly function . important ' I . to a gl,lbal
mcdwm of global corporate llet t on Integrated "orld c 1aracteristtcs
ro d \\ orJ\s Sc . d scale h .
a \ ance. so that the OC\\ ,nd . con ' corporate po , t rough th
1 wanes . \Ver 1 e
Stlc) carteli?ed. Third, toda) 's ,;1 b ate progressively olig .tas continued
ttaltLed through increased 'hofl. o o aJ corporations have be opoltstt c, pro,res.
t) pes of joint \ cnturc t , . O\\ mg out, new forms f come more dt 'e
r,uco
1
c all' o sub \.
corporate oroaniLat c- ' lance and othe -contracting
,:::, JOn. r ne\\ 'net' k ' new
"\or cd. fc
(Amin and Thrift 199 . onns of
9. see also
Tl . . Loewendahl 211
le Jmplrcation of the Ernst and K. 01:
b} A min and Th ft sc de\ elopmcnts for Jo 1 Im 2002)
n . ca and re
gionaJ econo .
Tl
mtcs wer
1e majorit' f I . . c. set out
.I o ocalttics ,
gro,, th and accept the . need to abandon . .
integrated indu laid down by thethe dlusiOn of sclf-sustainin
t Jose interregional and C\ clopment and growth of increasingly
production) h. tnten1atl0n l ,. . lS may in 1 o
. \\ lch will b" a mkages (t d vo ve pursuing
upgradrng tt . . t: of most b ra e, techn 1
b)' . le of th, 1 . enefit to the 1 . . o ogy, transfer.
Jmpro\e t: ocal1ty , . . ocaiJ ty .
to att to \\ lthm zntemat,o 1 In question and
ract b tt . na corp , .
e er qualJtv b 1. supply and . fi orate ht erarchies
ranch Jn rast
Jn\ estmcnts. ructure base in order
\\h
ile such h (A
dc\elop a co s arpl} drawn t)' 1 . min and Thrift 1999 182)
mplex and PO og1es c
mcnt ha,e focuse nuanced unders . an be readil y criti . .
2002: Coe e! a! on the emergence . of the flo ws and ctsed, vanous efforts to
global 04: Phelps and \\" global production tmpacts of inward invest-
Pohcics, the networks hale 2004). Accordin (Henderson eta/.
of. take up of lCT cd m relati on to g o Ifcnderson et a/ (200?)
fi 111tem and a co b. -
rorn diff . atJ onal b . Intensify ' m JnatJon of l ' b ,. .
,, . ercnt soci . us, ness r ... . mg global , . ' era 1sat1on
.'anety of Prioriti etJ cs. While resp ccognt ses that firms competition. This concep-
C<tch ::relation to to ' global ' and other actors
tl
ns filr firm and I Understand in tiny. growth and e c .pressures, can ha\ c a
lree P . ocal and order t conom
1
c d 1
nncJpaJ elc regional d o assess the eve opment which
et a/ ?( lllcnts c cvel producti '
... J04 J - value
0
Prnent G 1 b on network's I'
bctwee ' lC ps and \\' . Power and . o al productio unp tea-
aura ... n these clement . h aky 2004) U d emheddedness (He d n networks comprise
ct tng and cmb d . s elps us I . n crstanding th . n erson et a/. 2002 Coe
c dmg cxtcrntl .o understand the e of the relatio , h.
' Jn vestm potent1al poli . ns 1ps
cnt for local and . cy Interventions for
regJonaJ develo
Pncnt.
ATTRACTING AND EMBEDDI NG EXOG ENOUS
--___
Plate 6.1 Transnational corporations: global firms in Sydney, Australia
Source: Photograph by David Charles
Value can be created through technological innovation, brand reputation, or special
it can be enhanced through technology transfer in connections between lead firms
and their suppliers; and it can be captured for a ho t econ01ny by means of the regula-
tory regin1e and the provision of fi nancial incentives which place limits on prof1t repa-
triati on, specify the local content of manufactured products or en urc decent labour
standards. Power is exercised in three ways in global production networks. Corporate
power accrues asymmetricall y to firms and their affiliates, but in ways \1 hich can allow
affiliates to exercise a degree of autonomy. Power is exercised by the nationaL regional
or local state although in ways that arc markedl y different between countries. Also,
power is exercised by international organ1 sati ons such as the WTO or EU and power is
al so exerci sed by groups such as non-governmental organisati ons (NGOs) and trade
unions which seck to influence the acti\ities of international corporations. Final!) the
global production network is embedded first in the set of connecti ons that li nks firms.
government and other actors which arc often hca' il y influenced by hi story and the
national contexts in which global firms originate. In addition, global producti on ne
111
ork>
become embedded in places and this cmbeddedncss can become an influcncmg or
constrainino factor in the local and reoional development contribution of I n thl"
0 b
perspective regional devcloprnent is conceptualised as:
a dynamic outcome of the complex interaction between territoriali zed rdaticlJlal
networks and global production networks within the context of changtng
regional goven1ance structures.
(Coe et a/. 2004: 469; sec also Smith et a/. 2002)
-
I
d regional development agencies
The role of roca an
. . , t .. nd Joc:d and regional Jcvch>pnlcnt long b
Nlttontl s '' . . Ccn
1
' '
1
.
1
" ttion incentives to rnobdc Jnvestors. ltH.lct;d, the provis'
itn olved lfl proVt(. mg oc, . .. .
10
11 of
. . . . . ltrtl dctJH:Ilt ofn:gtonal hom the 1950s as we des .b
. I h tnccnuvcs w.ts ,t <.:<..:r ' . en cd
!'ill:
4
J) . ttl. JtJ60s and then.! ts cvtdcncc that Jn ve\tmcnt incc t'
in Chapter . UJ mg
1
<..: n 1vcs
J
. lt . .
111
ning the of mobile ftrms within .
rlitycd a fO C I Jl ( <..: 1.: II . COUll-
. j . . t' , uring employment tn laggmg reg10ns (e.g. Moor .
tnc. an< tn Cfc,t mg ' . . . . . . . c tt nd
I
')v()
1
1 t SltCh policies have hecn cntJctscd m pal t for prov tdmg incentive
J{llOdCS n J >ll .. S to
(
. t' . ) .
01
ct ..., tht would have occurred anyway - so-called deadwetght ' efcect
I rm s ()I I r . c ... n . . . J s -
generating wasteful compclltJOn to the creation
of branch plant hy lfl(.ltscnmmately plants whtch were weaklv
embedded in local economics and provided only scmt-sklllcd forms of
(
1
). As we di. ringuished in Chapter 2. "'uch pol i<.:ies helped to create devel-
opment in the region. bur not development of the region (Morgan and )ayer
Thc!-il' c.:riticisms and chilnging perceptions of the nature of FDl and ih development
potential alt\:rcd approaches to the attraction and ctnbcdding of mobi le with
rcg
10
mrl and kH.:al dcvcloprw:nt agencies generally adopting more proacti vc policies.
young and fl ood ( I tJ95) identify the challenges fa<.;ing inward investment ag ncies
scckmg to rmrxin11se the local and n:gional development potential of 1 Dl in the chc:tnging
ecmtomic context. These include the need to target investment which can contribute
toward!-i the broader objectives of local and regional development, the qual ity
of investment projects (e.g. the type of jobs, occupations, functions, supply chains) and
movi ng beyond nat row performance measure(, such as nun1ber of projech attracted and
jobs created. The rcct::nt paucity of large-scale. greenfield manufacturing investment in
developed countries lllakcs it necessary to generate investment from
within the existing stock of in any gi\ en location and forestall rati onalisat ion5,
leading to JOh loss and closure. lt is also thought necessary to integrate inward invest-
rnent promotion anJ broader local and regional dcvcJoptnent programmes. connecting
e\O!!Cnotts and indtgenm'" Attracting new types of mobile investment such
'
1
s sen tees, R&D and hcadquartt;rs activtt1cs is abo in1portant. As we outlined in Chapter
3 the cmen!cllc" <)f k 1,1 f
' . . .... .... ' llO\\ t:< gc economy places a prcmtum on the development o
n.:'gtnmtl llltlO\ at ion systems (Cooke and \1organ 199H ). Young et a!. ( 1994) ad\ ocate
a nf \lev"lt)f)lll, lt ' 1 t , .
.. "' \.:1 ol arget tng . \\ luch atnounts to:
a pmccss '' hirh identifies inward in\ t.:stmcnt market scumcnts which match the
dt.:slrl'd outi)Uts from , .. 1 . o
1
. . ,. .
111
""H tll\ L'stment (tn tcn11s of cn1ploymcnt. techno ogy
t 1.111sl t tt atk and htl . ,
1
. . . )
' . . '
111
(l:
0
payments and ltnkage and spillover effects to
thL t:OI\lf>L'tltl\ '. I . .
'-= < nl rountries and regions.
rlti s .
1
)
1
..
1
.
1
. d
. . , . ' ' llllMl
1
Is adopted - in rhetoric at least by many loca an
l.'luplllL'Ilt '\gc . , 1\ . 1 d a
' nul:s. s we dtscuss in n1ore detai l in Chapter 7, tn lrc an
ATTRACTING AND EM
BEDDING
EXOGENous
. RESOURCES
. of olficial reports stgnalled a move 'lw
1

' tty rom an
0
. .
ign invcstrnl!nt to a more targeted approach t , . tn tscnminate attra .
tor\,; , , o Pdntcul . . Ctton of
(
..
11
as R&D). a emphas1s on aftercare . d ar mdustncs and act ..
ctn more p . 1VItte
,,led industry (l!.g. 1 mnaney 1995; sec al so Fuller . I nonty on promoting ln'sh
o'' . an( Phel ?( -
. . of inward mvcstmcnt agcnctes arc set out in T bl P ... l04). The broad f,
uons . a e 6.2 Da . unc-
I
. t few inward mvcstmcnt agenctes meet the ideal t . nson eta/. (1998) obscn
t ,,, . . . . d. ype. As we s , . e
. n of rnobtll stng m tgenous resources in ( hapt _ uggested tn the discu _
:)10 . . . cr succes f 1
, )rallY able to tad or theu acttvitics to the concr t . s u regtons though are
. . . c e ctrcumstan f .
local and rcg10nal cconotntes. o thctr particular
Exogenous or externally oriented strategies have the .
. d. potenttal to conn t . l
mplcmcnt the tn tgenous approache\ di scussed in Ch ec Wtt 1 and
co . apter 5. Explicit li k
rammes have been used to explolt the market opportunit' n age pro-
g . . tes Or the supply of d .
crviccs from local and regtonal busmesses to inward invest
1
goo ,md
s . ment P ants, especially h ,
autonomy has been dccentrahsed and dectston-making devol d
1
\\ ere
. . ve toP ant-level (see A min
et a/. 1994 for an analysts). Such strategtcs can encompass su
1
, h . . . . .
. . " PP ) c am mtttattves by
local and regtonal agenctes 10cused upon technology skills and t .
. ' rammg. and manage-
ment. Such programmes can be deliberately oriented towards indt'ge
1 11 . nous. oca v and
regionally owned compantes. The knowledge transfer from extemall\'
0
d
1
"
. . . wne p ants can
have a demonstratton and upgradmg effect upon indigenous finns. dri\ ing innovation
through supply chains and enhancing their through such as
auditing mechanisms, technology transfer and formalised relationships {Vale 2004 ).
Table 6.2 Functions of inward investment agencies
Policy formulation
Liaison and dtalogue with parent organisation
Guidelines for inward investment policy
Assessment of effectiveness of policy
'1&7
Integration with nattonal and regional industrial policies
Development of partnership scripts and protocols for joint working
Investment promotion
and attraction
Investment approvals
Granting of incentives
Providing assistance
Monitoring and aftercare
Marketing information and intelligence
Market1ng plannmg
Marketing operations outside and inside the relevant area
Management of overseas agents and offices
Screening and evaluation of potential projects
Consideration of investment offers . .
Incentive application advice and approvals (rncludtng
financial incentives plus training grants, rnnovatJon gran ,
land and buildings, etc.) . t sewerage.
Assistance with public utilities (roads. water, electnct y,
telecommunications}
Facilities and site
Training and recruitment
. . d earch institutes
Links with universrt1es an res
Supply chain linkage and development
Continuation of assistance reinvestment
nt and lra1son
1
Relationship
1
suppliers, etc.)
projects, upgradrng loca
Source: Adapted from Young et al. (1994)

' TRUMENTS AND POLICIES
I . TRVNTION5:
r. J inward invc. tors can ampli fy external economic
k
haped bv ,oca . h fl . rcdu .
k Ag<.:ncJes ave <> ten used suet Ctng
h for networ ' 1 Polic
rransactJOn
1 1
. k' !!C in an attc.:mpt to anchor and crnht:d extern IJ to
ah, ed loca m a_ a )
0
,
grO\\ spect d ,,ons Yet. initiat1 . .?\ can abo lock-in high) \ned
.
1
aJJtJcs an rei:! ) loear
w _oc de . cndt.nt \\ ith cxtcntal.y owned For the . t td
mto pd , onal a.!\ct and linkages can be to their d Inward
local an regt . . . . . a
JO\ c )thcr places wtthtn lllfrd-COrporatc COIUpCtltJons for in cC
against other planb m t 'estrnent.
d g'
onal economies in practice
TNCs an re
D
. tl e claim-. of some commentato[ . Phelps and Waley (2004) suggest that
e;,pJte 1 much
f h
,. t literature ma)' JJa, e the rent.: wed local oncntatJ on of TNc T
o t c rcccn . . s. hev
. tatn that the exttnt of local hnkage!> and the tmpact of local supplier inJt .
mam ' . . 1at1ves
t b
e ct aoainst trends toward the consohdat1on of procurement among .
D maJor
international partner supplier finns. The autonomy of local affihates and the attem
1 d b h d pt to
influence them by development agen_ces JS Jmlte . Y t e1r ependencc on decisions
made in global production networks. fhere are few. 1f any, truly global' corporation
although many employ that rhetoric for marketing and other purposes. Most still
strong roots in their national economics. The most internationalised firms tend to
0
.
.., . . . . ng.
inatc in small countnes w1th constramed domestic markets. Even among the largest finns
mo:;t tend to locate the bulk of their production in their home economy, with key func-
tions such as R&D only partially internationalised at best (Ruigrok and van Tulde
1
l99S

UNCTAD 2004). Ruigrok and van Tulder (J 995) contend that the nature of a nnns
domestic bargaining arena (vis-a-vis the state and labour. etc.) is at the root of its
internationalisation strategy. Thus. a company's intcmationalisation strategy is heavilv
influenced by the nature of its bargaining relations \Vithin its domestic industri;l
complex and, as we discussed in Chapter 4. its attendant economic. social and political
structures.
. Thus. Di cken (2003) wams against alJ embracing. evaluations
on ho.st focal and regional economics. The net costs and benefits will depend
on the mtcractlon between the attributes and functions of particuJar activities within their
corporate svstcm and the natu . , d h . . .
J rc an c aractenst1cs of the host local and reg10nal
economy The impact of the "' d I
sc opments can be seen in contrasting case studies.
Coe et a/. (2004) have CX" n . . I h .
. a ltnc<. t e 1mpact of 8\11\V's investtncnt in the underdcvel
oped rcgton of eastern Ba,, . u\
1
u, 1 , . .
. . . ana. o . nas traditionally concentrated rts German mvest-
mcnts m M umch and rem a. . 47 .
rn th ...
1
,
198
. ms per cent owned by the Quandt family from Bavana.
c car ) (h. the com d . , . . . .
eastern
1
>. . pany ma e a strategrc dec1S1on to expand its productiOn to
>avarta. attracted b k"lld , . .
in the fac" of . . . Y
5
.
1
c labour and the wJIIingness of the local umon -
tices . from rts national headquarters - to accept new working prac
. >I vv mvestcd !7 billion . . . .
35.000 people wtl . t tn the region: creatJng three plants. directly cmploymg
.
1
1 a urthcr 20 000 .
1
. I
Site in Rcgensbur ' crnp oyed tn sup pi icr firms. BMW s pnncrpa
g was made avai l bl , r. d to
abandon the constr . . . ct c a.tcr the ( ,crman government was force
, uctron of a nude ,, . , . . . .. . ,
1
d
slate governments p ..
1
,,
1
. . ar "astc facJ IJty tn Wackcrsdorf. fhc fcdera an
ro, "Cu tncent1v d
cs an Infrastructure to att ract BMW to the reglOn.
TIN G AND E
------M-=B EDOING
EXOGENous RE"'OU
RCES
rhc production introduced b B
y M\V rc .
and omc of these global \Uppliers branch
1
qu,rcd co-location f .
{irJll:> P ants hav
0
suppher
. h' n their parent settmg benchm k c no\\ become lead
\\ 1t J ar for oth tng plant
rk Coe el a/. (2004: 4 78) conclude , E _ er plant in the d .
net'" o -astern Bavaria, . pro uct1on
. hout doubt, benefited from globah/lng proc . s regtonal econon h
wtt I - ..... e scs hnked to . lY as.
d
uct ion net\\ ork . It represents an example of t the reg ton , ia
8
.,
1
\H
pro va uc creatio ( h 1' ,., s
and value enhancement (through the trans" n t rough the new inve t-
rnt; . . cr ot techno! s
r. ' Jitatcd by mteract10ns and negotiations betwe h . ogy to supplier firm)
1acJ . . . en t e firm , ,
rescntatives wtthm the regton and beyond. albeit. . go,cmment and labour
rep . m a context wh B
erable er by vtrtuc of the scale of its presence. ere M\V has
B) contrast. Phelps and \Valey (2004) have exam d. .
. . me one muhm f
1
ttempt to d1 sembed 1tself. Speclfkally. thev examine th
1
. k . a tona company's
a e m ed mvest
rncnt strategies of Black and Decker in North East E
1
d . ment and dl\e t
. ng an ( dtscussed in d .
0
Chapter 7). northern Italy and Chma. Black and Deck more eta1l
) . er captured a mono l r
market for power tools m the 1960s. althouoh bv the
1990
h. po ) m the
, . .
1
;:, t ts market had d
and the company s monopo1) posrtJon was eroded bv orO'.\ inc' .l
. . , e E retat er power, dtmtn-
ishing brand strength and lovv-cost competttton. The companv a 'dl . . .
. J r PI v mtemattOnahsed
in the 1960s from tts base m Balt1more, adoptino a
1
. d . '
. . . . . .: c ass1c eccntrahsed
multi-domesttc organtsatJon cons1stmg of twenty-three whoH,, d .
. . . ne manutactunng
operations around the world, gtvmg a degree of autonomy to its local operations. Faced
,vith the erosion of its fi.Im began to consolidate its power tool operation
and initiated a process of ratiOnalisatiOn. especially in Europe. with the intention of
specialising in a narrow range of products.
The autonomy of factories therefore began to decrease with the centralized allo-
cation of nev: products to remaining production operations ... (although] an
element of affiliate management autonomy remained promoting a degree of
intra-corporate competition for the right to manufacture new products.
(Phelps and \Valey 2004: 200)
In 1998, Black and Decker announced plans to close four power tool plants. one of
which would be in Europe. This generated an intense competition for survival bct\'teen
two plants. one in Spennymoor, '\Jorth East England. and one at \1olteno, near
in northern Italy. .

1
t xt of the Umted l(jngdom
The Spennymoor plant operated m the <. 1strnctrve con e -:
. . . . l , . . 1 monitoring of or pertom1-
wath Its open door po1icy to FDL whtch mvo \es mmtma .
. . .
1
, t a local economY hea\lly
ance requircn1ents placed on rnward mvestors an<. "It un
1
l pk nd Tomaney 1999). t
dependent on FDl (Phelps and \Valey 2004: 200; sec a
50 1
e a . t lativclv
. . . h . . tment and dt\ estmen n::
1s thas li ghtly regul ated context \A.'htch makes bot . . . t 1 Europe.
. . I d nomtes m conttnen a
straaghtfon.vard and Jess costly than m more regu ate ceo . . the most dcnsdv
d ed non-unwn tn
The plant was one of the con1pany's largest an rematn
1999
) Faced "ith the
. . . . . d (P.k and Tomaney .
umomsed reg1on of the Uruted K1ng OJn
1
c . . ght to
h d
, I ment agcnctes sou . ....
t reat of closure, though, local managers and C\ c op .
0
over 1 million
t
. . . . ts and by sccunne
t tear bargaining position by reducrng product JOn cos
. ' . nt in the plant.
10
state regional poli cy support for new mvestmc
,
J
AND pOLICIES
t"JSTR UMENTS
INTRV r:TtONS: . ... " . . .
_ r"'phical mtcr<.h.:pcndt:ncte!:> tn ,
1
f the ocog c u Pro i
ln a measure
0
. ,. s disaster for the plant 10 l\ loltl: t . ( llction
0]()01' $ tJCCt;;!:-. 10 Ill L
penn) . :\
1
hcm Ita I) presented Blacl-. and \\ tt h .
. Lombard Ia. l Ol I . tl (h t
P
ro' incc 10 . . r
1
al contc\.t. p ant ' ' as one ot the tc" for.
. . . and mstt tu IOJ . . , O\.
socw-economJc . d t _
1
,1 } distnct dommatcd b) stnaJJ and Sttb \ned
. . ted in an tn us t . . , . Ject to
loca .
1
ton rct,.
1
mc. the plant tn Spenn) 11100r
1
the
nt ltahan regu a . : , t 1c lt-tJ
more rnnge . .... . . bet\\ the cost structure of the l tan
om ed. A Jll,l_IOf . two pi
plant ' ' cl um . , nt\ of the northern Ita han econon1) and the ti gl ants
h t1 c relatl\ e prospc ., l 1ter lab
wa t at
1
. t that it \\ ditlicult for the Molteno plant to n1akc usc f our
k t r "gu]aoon. mean . . .. o temp
mar e t .., 'th pclk and troughs tn the production cycle
0
-
rarv \\ orkec to cope \\'t c .... ' vera! L the

1
d h'ohcr production than the UK plant and tt was for th'
\tolteno plant 1a lo . reaso
marked for closure. The local untons and the management n
that the plant became ' . . . 'ogether
. .
1
tlO\ 'enlmcnt. de\ eloped a ca c for retatntng the plant, but w} .
\\ tth the regwna .:; . . .
1
en th1s
&:
1
uoht to maintam the stte a a location for production. The mo .
Jooked ror om. so o . re stnn-
1 l q
Jirement urrounding plant closure tn Italy meant this local co
1
..
oent ega re t ... ._ . . a ltton
;ompeJied Black and Decker to run down the plant In \Vays whtch kept the facilit) and
kc. ntact while ne\\ 1n' e tor \\ere successfull y attracted to the site
" 01 1orce 1 . . . . . , partly
through the provi ion of pubhc m' e tmcnt Local and regtonal development
institutions therefore played a critical 1n. mediating the processes of international
economic restructuring with decisi've for local and regional prosperity.
The rise of FDf in senices raises the question of the degree to which these can
embedded in regional economies. Sorne economi es have attracted a lar e
amount of mobile sen ice inYestmcnt. Ireland: for instance. especial ly the greater
region. has become a major centre for software production through the attraction of FDI
(see Chapter 7). Employment in sofnvare grew from 7793 in 1991 to 31 ,500 in 2001.
although it declined thereafter. The majority of thi s employment \Vas in overseas finns.
\\ hich generated o\er 90 per cent of the sector 's revenue and a similar proportion of the
ector' s exports. \\ith Jrish-owned finns tending to be niche speciali st5. The attraction
of a number of high-profile international investors including Microsoft helped to produce
a pool of ki lled software engineer. which in tum helped attract further investments
Directorate 2004 ). T\'C affi liates of soft\vare fi rms in lreland began
m the mam by manufacturing packaged software, but the role of a fA I iates evolved into
the more complex task of ' I 1 (".
. '. oca 1smg so1t\vare 10r different markets. which requires a
range of engmeenng ski ll s le d' . . .
a mg to an upgradtng of the tndustry's sk1lls profile. The
dt:\ elopmcnt of software l 1 . . .
. . oca 1sat10n act iVIties has st1 n1ulated the gro\vth of s1gmficant
supplier mdustries in Ireland t' bl
{ bl
. no a Y m pnntmg (of softvvare manuals). tum-ke] sen ices
nota v packaomg) and the t .
TNC h. := ou -sourcmg of localisation acti vi tics themselves. Over time.
ave opted for longer-t . I. . .
nities for th
1
. h erm supp ler relattonshtps offering de\ elopmcnt opportu-
e ns economy IDA 1 1 d h d
upgrad , f't' : re an t e de\elopmcnt agency. strongly supporte
mg e Orts. ThJs u ' d. .
becorninl! Eu pgra tng process means that affiliates are
.... ropean corporate hubs d h
corporate hi .. rar h... h . an now occupy more important roles wtthm t eJr
252 sec al 6 t an dunng previous rounds of inward investment' (White 2004:
. tam 2000).
The lnsh affiliate of th C , . .
the 1990s as an e .
1
e anadtan software fim1 Corel was \Videl y cited dunng
xamp e of succes f I l . .
s u P ant upgrading. although, ult imately. thiS \\ as
ATTRACT I NG AND
EMBEDDING
. , 1 1 . , .
f
r tt:nt to tt rom c osurc. l ord lo<.:"t ,.1
nsu tc .. . . "' cu tn Dubr .
: 191.
. . -
1
1
mcnt after dcn1onstratmg tts ability t tn tn \993, grad ,
11
oy .. , .
0
outpcrfor . ua Y expandin ,
l
, in softw,uc localt satton. By the end f h m tts firn'\'s h 'd g
cnncl ( 0 t c \99() . ea quarters i
0
taff. Ocspttc the profitability of the lr h .s. the lrish affiliate n
10 s ls opcratto b employed
- ny led Corel to announce the of .t I . n: roader probl ..
cot11 Pa
1
)ublm off ems m the
tee. White observes:
The affili ate' s superior performance or good
1
. .
. rc atlonshtps h
( ons proved tnconsequentlal tn dctem1ining th. f . WJt local institu-
1 , c a fi lt atc's fut , .
.t was not local factots but rather factors intc .
1
urc .. Ulttmatcly
1 . . rna to the cor .
mined the embeddedness of th1s part1cular affi liate. porat1on that deter-
(\Vhite 2004: 254)
D
Sp
ite the relati ve success of Ireland in attracti ng su h 'h' .
e c tgh-quaht , .
}
avy dependence on decisions taken outstde the count Y mvestmcnt, its
1C . ry means that such
1
. always at threat from corporate-dnven rati onalisation D . h emp oyment
IS csptte t e sectoral d' f'fi
nd nati onal contexts, the Corel and Black and Decker stor h .
1
crences
a . . . tes ave Important similan-
ties and imphcat1ons for local and reg10nal development insft t' . .
.
1
u Ion strategtes a1med at
a
ttracting and embeddtng exogenous resources. The closure of Bl k d
, . ac an Decker's
[tal ian pl ant as a centrally conceJved parent-company strategy was no respecter of the
accumul ated status and network embeddedness of major affiliate (Phelps and
Waley 2004: 2 11 ). Indeed, the Black and Decker story had a further twist in 200l and
2002 respectively, when the company shifted jobs from Spennymoor to Suzhou in China
and to Usti in the Czech Republic in search of cheaper cost production locations. The
threat of closure once again hung over the plant and was enough to extract further invest-
ment incentives from the UK state to safeguard' the remaining jobs (Phelps and Waley
2004 ). These issues not onl y confront individual firms, but also can sweep through entire
regional econo1nies when they become dependent on a concentration of externally owned
branch plants in particular sectors. such as in ' Silicon Glen' in Scotland (Example 6.2).
Coe eta/. (2004: 4 71) conclude that economies of scale and scope embedded within
specific regions are onl y advantageous to those regions- insofar as such region-specific
economics can compl ement the strategic needs of trans-l ocal actors situated global
production networks'. 1t is thi s process of 'strategic coupling' that determines the
pects for local and regional developtnent emanating from the attraction and cmbeddmg
of mobile investment.
Attracting and embedding occupations?
. . and embedding mobile in' est-
The challenges confronting those charged With attractmg . . ofound. especially
. d , lopmcnt 1 emam pr
ment m order to promote local and economtc C\ c
11
, views the ability of
. b' l . cstment genera )
tn lagging regions. The literature on tno
1
c
10
' . rt' t yet diff1cult. J\nn
. .1 . . tmcnt as tmpo an ..
regtons to target specific types of tnobt e un . dd. . lO industrit:s based on
M
atwns tn a Jt\On h
arkusen makes the case for targettng occup fi and ,, orker to eac
. nt of both rms ' .
acknowledgement of the ' decreastng commJtmc . . r k from remote 1te vla
d tl e abtlttv to "
0
r
other or to localities. due to integratt on an
1

. . 1\STRUMENTS AND
INTER\
POLICIES
. . in Silicon Glen
Example 6.2 CriSIS .
. hct\ pc brctnch ph1nt ccononl) , \\ tth a :')
. , Glen ,ltl . t'. d . , . g Iepre,
..... )tl'lnd . nufJc:turc1.; t'Otland 1aet: d ,, hen th,.
_, tl , hard\' arc f11,l ' c 'il' It 0)
,nwtion of computer , t
111
d di' t'"t posing nc\\ chalkngcs for tic, cl 1s
do'' ll cmplo) Jllt;O ( . OJ1tnent
bc!2an to run . ,.. 1 from Bu., me'\ II eel. shO\\ s.
- . " . J . the foliO'' tng
a a "nt.:lt s.
::;
Silicon Glen: forctgncr.
spa\\ nGd a high-tech bootn. NO\\ th ,
C) rc
Cloud. O\ er
pulling out . . .
d d
cod once-\ tbrant S1hcon Glen. On Auo
1
\ all has de ccn e 0\l: . o ,
P . c the \ labama-bascd maker of con1puter and electncal gc
anmma- Cl orp.. . . . ...., ,
. ld IJ\ off ""50 at rt plant tn If\ Scotland. Sources
announced 1t "ou . .
.
1
Greenock wh1ch emplo}S 5.500 \YOrkers, Sa} plans re
at operauon n .
hft ' manufacturing out of Scotland as pat1 of the company's
under way to J ' '- . .
1
. need rc tructunno. 'FJ\e ;ears ago. our staff spent all therrtime
recent ' annou o .
J. ri e 1nd better benefits for electronics \vorkers,' says Danny
ncgottatmg pa) u , . . .
Carrigan. the Scottish head of manutactunng trade unton Atnl CU<; . ' Now they
seem ...to spend all of their time deali ng with layoffs ..
Scott ish officials began wooing foreign tech companies in the 1960s with
regional go' emment grants. A host of n1ostly American and Japanese multina-
tionab took the bait gi\ ing rise to a 50-tnilc hi gh-tech corridor stretching from
Edi nburgh to Glasgow. By the early 1990s, electronics had di splaced \\ hi sky as
Scotland top export.
\ o\\. the di tress in the global technology industry is ex posing the \veakness
of an economic pol ic) built on winning foreign investment at the expense of
de\ eloping homegrown indu tties. International heavy\veights such as \lt otorola
Inc. and \EC Corp. are shutting their Scottish plants and shifting production to
Asia and Eastern Europe. Silicon Glen's assembly-line \Yorkers earn an average
of S I J OO a month. approximately ten titnes rnore than their counterparts in
China. Job losses at Silicon Glen O\ er the past two years add up to some 15,000
- more than 20/o of the area' s workforce. 'Silicon Glen has been a n1ajor contrib-
utor to the Scottish economy. but we have become overly dependent upon a
narrow base of foreign companies.' ays lain VIc Taggart, general 111anager of
the Scottish Council for De, elopment & fndustry, a lobbying group in Glasgow
Scotl and. home to 5 million people. depends more heavily on exports than
doe. the rest of Britain El , .
. . ecttontcs make up) 1 /o of Scotland' s overall exports.
The m Stlicon Gl .. -t 1 ' "' . .
en 1tppc( out S" b1l hon worth of goods 1 n the fi rst
quaner of 2002 - dO\\ n 16 3o. f .
F .
10
rom the same period last year . . . Scott tsh
Ant erpnse. the o
0
, em .
i d , I
0
. mcnt agency charged \vith promoting the clcctrontcs
n UStl). lS WorkUH.! with I , . f , . .
:) j)i n-off ., . .
11
dny
0
Scot land' s n1ost presti gious uni vcrsJt tes to
nc\\ ar1d b .
..., usmcsses.
Source: Business 2 September 2002

ATTRACTING AND E
___ RESOURCES
-- rnct (2002: 1 ). Such an approach wo ld .
hC I ntL: l. u suggest
t .
1
de\ clopmcnt po tcy to one where the . a subtle shift in
1
cgtonn oca\ and
' . tn types of workers, rather than a focus on p . arc pro\ ided which
r
1rucu ' .
2002
?QO arttcular cc . attract
c l 'lfd r Ia nda ( a, - 2b) has gone furth Onomtc activittes 0 fi
RtC h . cr and argued
1
r nns.
es reli cs on att racttng and retaining rnctnb . t 1at the future of
1 conotn' Crf:) of the . oca\
L; d'lO work in sectors such as technology rncct creative cla% , compris'
thO c ' ' . . . . . . . ' la and entertain mg
e activttl es embody creatlvtty, mdtvtduality and d'ft- ment and finance and
,, hOS f h 1 terence c . .
Florida, is the new motor o t e economy. Creative t . according
to d dress codes, flexible working arrangetnent can be tdentified by their
rclaxc . s an le1sure a f
. se and extreme sports and thc1r preference for .. d. c
1
' ltles focused on
excrc1 ' . ' . tn lgenous street \ l
a
re attracted to bohe1n1an env1ronments that c . e\c culture'.
TheY . . . . an pro\ 1de the d. .
.
11
uppOlt their creat1v1ty. Such Clttes arc suppo
5
cd\v ch . con tttons whtch
w1 s . . . J aractensed by the .
3
T .
talent and technology. Cttles, m particul ar. according t Fl . s :toler-
ance, ' . o onda. must now c
ttract members of the creative class' by creating the , . ompete
to a . en\ uonments m which th
h
se to live. The creatt ve class values places for their authe f . . . . ey
c oo . . . 1 . . . . n tctty and dtstmctiVeness.
Al t
hough mfluenttal - seveta US cttles clatm to have tmplement d
1
. . .
. . , e po 1c1cs a1med at
ttra
cting rnen1bers of the creattve class - Flonda s analysis and presct
1
t. \
a . . . . . P 10n 1ave been
criticised. While Fl onda man) '. tf not alL cities can create the conditions
for the growth of the creat1ve class, m practtce he seems to be describing conditions in
citi es which are at the leading of_ the ledge-based economy, including 'world
cities', and which may be consohdatmg thetr economic advantages. Peck (200S) has
criticised such ' hipsteri zation' strategies and the analysis upon which they are based,
suggesting that they involve little more than the celebration of the lifestyle preferences
of high-income groups in ways which accelerate inequalities and intensify territorial
competition with potenti ally \vasteful side effects (see also Asheim and Clark 2001 ).
Florida, hi mself, has stated that the emergence of the creative class appears to be linked
with a grovvth in inequality in \VOrld cities (see f ainstein 2001; Bucket a/. 2002: Hamnett
2003 ). Despite its weaknesses, Florida' s work does draw attention to the _of
human capital in local and regional development. in generaL and the attraction of mobtle
investment, in particular - as we noted in Chapters 3 and 5. rather
less breathless analysis points to the importance of\\ider labour pools m enhancmg
. . . h fi ents of incomino finns. Actt vtttcs
attributes not simply 1n sattsfytng t e spect c reqUJrem o .
' 1 ts with sptllover effects
which seem aimed at local n1arkets may constitute reg10na asse . .
. . f t' s This the nnpor-
on the productivity of other reg1onal econon11c ac
1
\:
1
te f
. . h d t' and perfomance o a range
tance of skilled labour ' because tt tncreascs t e pro uc
1
\ . . . fi
. . d . . eating attractmg and retammg n :>
of finns and industries, both 1ndtrectly an vta m cr
1
t nstitutions have
2 7) L
1 and regional deve opmen 1
and thus jobs' (Markusen 200 : oca v . .
1
r occupat
10
ns - and
h
.d f attractmg parttcu a
onl y recently attempted to translate t e 1 cas o
even the creative class' - \vith as yet uncertain outcomes.
Conclusion
f nobi k im cstmcnts
. s in the fonn o t
The attraction and embedding of exogenous resow ce
1
. nd rt!gional de\ clopmcnt.
. ects for loca a ...
and occupations remains cructal to the prosp
AND POLICIES
INSTRUMENTS
.
1
i 'a'\urcs of focal and reg10nal de' clopn1em lt l\t .
. . rnent . an' tllt: . llllltons
The tn. tnJ . . a tnd de\ cJoptng the potcnttal ''ell am ,
1
. can
. . . nn', rctaulln.::- , . . . l:
be pJ\ ot:1l 111 scc.:u . ::: .
1
. , fomls of cconon1tC actt\ tt) and gro\\ th.
1
\('. g
. f tcntwll) foot oosc d , .. \ contt
P
roblem o P
0
.. )f the ,, orld cconom) . In t:t:d. the gro'' tng
11
.. ,
1
nue
s and . hnpt.: l . . . l: tH. to,,
to be the mo' cr. . ,..
1
t bet\\ ccn and '' tthtn countnes ts probabh , tlrd!\
. f econorntc n: a tl , . J contrtbut'
dcregulauon . f tl .. posttJOn of 1nobtk firms . Local Jnd regional ,
1
tng
"nathcnJOg 0 )t; f I r I( " t:
0
Pme
to the tn.: e d b the chmn1no nature o t 1e ' and. especi'lll) h nt
. influence ) t: e ' ( . t c em
pro. pects are d . n .. t,, orks 1 he of such net\\ orks can t er.
f rlobal pro uctwn t: . ... . . < l<l\ c quit
gcnce o g . . . f r different regions. fhcrc ts C\ tdcnce that some localt e
b. auous unpltcatJOn. o . t te and
am
1
o . d ,
1
m nt a'1encics ha' e prO\ ed adept at workmg with th.. .
. ion and thetr C\ t: op l; .::- . c gram of
teg . C . ation to nut\.itnisc the local benefits of mvcsttnents. \tt . .
change m T0! orgnnt. f . . ract tng
.... . a .. a elen1ent o exogcnous-onentcd
0
.
1
"
articular occupatwn. o . . e\ e op.
pc . t \aatn the role of local and rcgtonal developn1ent tnst'tthJo
mcnt trategte oo. o . n and
. . . .
1
. ootmo uch potcnttalJ) footloose assets for local and region
1
d .
poiJC) 1 cnttca tn r o . . . . . . . . C\el.
r the ambtouttte!> and 'aganes of tcrntonal competitiOn re de
opment. e'en t o . . r any
h t
emall\ oriented de' elopment a dtfficult and uncertain strategy
approac to e\. . .
The C\ idence di cu sed here confirms the themes explored tn Chapter 4 an points
to the importance of etTccti\ c local and regional and governance as a mech.
an ism for dealing \\ ith the threats and opportunttles posed by exogenous development
stratee:ies. Effecti\ e local and regional pol icy which is oriented towards development'
'-'
and network' form of in ten ention can potentially help to ensure footloose and mobile
as ets contribute to local and regional development - albeit for perhaps ever more
fleeting time periods. At the same time, the role of national and international authori-
tie in limiting the effects of the kinds of unregulated tctTitorial competition
de cribed in Chapter I is increa ingly critical too. The effectiveness of the multile\el
goYemance system ''hich \\as C:\.amined in more detail in Chapter 4 then looks e'en
more important when considering exogenous approaches to local and reg'onal de\'el-
opment. The final part of the book - Pm1 1V: Integrated Approaches draws upon the
introductory context. the discussion of what kind of local and regional development and
for whom. the frameworks of understanding and policy interventions to consider our
case studies of local and regional development in practice.
Further reading
On the relationship bet . T\C A
'' cen s and local and regional development, sec Amm,
Bradley,
0
H?wclls, J., Tomancy. J. and Gentle C. ( 1994) 'Regional inccnti\es and the
quahty of mobtle .. t ' 1
41 1
) . . tmcs ment tn the less fa\ourcd regions of the EC', Progress 111 P
( 1 122, D1cken p (?003 Gl h . . . \ f p m
til
)j C - ) o a/ Sluft: Reshapino the Global Econonuc
1
a .
e - H enturr (4tl i ) L
0
f\
and Yeung. H.\V-C
1
ccn; Sage: J., Dicken. 0., tvt.. Coc. \
dc,clopmcnt' R . (
20
? ...) (Jiobal productton networks and the analysts of cconomt
. . e\ tew of !men ,. I p , ..
for a review of th
1
f Ia uma o I fLea/ Economv 9(3 ): 436 464. OO)
e rocso .
0
G (20
Go\'emance. lnstitt
1
.
1
Cl s. sec anson, M ., I lalkier, H. and Cameron,
1 1011
a wnge and Regional Development. London: Ashgatc.
-
Introduction
This chapter brings together the concern\ of the book d . .
1 d
. an constders mtegratcd
approaches to loca an regtonal de\ elopment in practice 1 dd . .....
. . . . t a resses a senes of case
stud1es m whtch the global context, modeb and theories of loc
1
d .
. . . a an reg10nal deYelop-
ment. mst1tuttons of government and go\ ernance and approaches t d.
. o 111 tgenous and
exogenous development pohcy ha\ e been played out in pa
11
icular 1 , h
. . . P aces m t e
for local and regtonal prospenty and well-bemg. Emphasising the point that local and
regional development is a global concern made in Chapter 2. the choice of case studies
is deliberately international drawing upon the from across three continents
globall y: Europe, Central and North Ameri ca and East Asia.
Each case study is organised around the ke) themes addrc,sed in the book. These
compri se, fir t, the kinds of local and regional development models and strategies.
Second. the concepts and theories used to understand and interpret the local and regional
dc\elopment issues and to inform policy and instttuuonal inter\'entions. Fi nally. the
specific de\ el optnent strategies and polic} initiati\ es. the e\tent to \\hich the) have bet!n
successful and their future challenges. The cases are different kinds of tenitories in
size, pro perity, development trajectory and go\'emment and go\ emance context. Each
refl ects diverse experiences and particular characteristics. legacies and predicaments.
Y ct, each case study shares common issues that arc revealed by an analytical approach
informed by the main then1es in the book. Each case faces shared challenges of eco-
. . . h blems of decline andror
nomtc adJ ustment and change, partJcularl y addressmg t e pro .
b
. . . . r
1
tl t ma)' prove more endunng
csta lt shtng ne\\' or recreating the condlttons 10r growt l la
.
1

1
1 and reownal de' clop-
and sustainable. Each place faces the task of analystng netr oca e . "
J t oies to shape thctr futun:
rncnt predi catnent and constructing feasible models a no stra ee . . .. ,k
0
d
. . . . a, nt of rnrcn set:
C\ elopment traJector-v A con1mon Issue IS the rnanaoeme
. . J. . " . . articularly bct\\Cl'n manu-
to balance tnd1genous and exogenous as ets and rt:sources p . _ derelopment in
fa . ,. d rcoion pursues tb
ctunng and service acti vi ties. Each loca tty an td go' crnanc-;
. . . . . . . t
0
f go\'crn mcnt m .
parttcul ar natt onal mstttutlonal and poltttcal contc\
5
- . blcrn-.. of ocw-
w t} dd . .. ng the endunng pro
1 1
tn an Increasingly n1ultilayered pol tty. A , cricncc of our case
sp 1
1
t connects tht;
atta mequality engrained in uneven dc\' C opmen
studies.

APPRO\ CHE S
...
th the \orth Fast ot l.:. ngl,md I ot tl ,
Hwh-.t:-. ''' 1..: ln
\\ c bcgm OUI '
1
, t' t to mdu-.tn,tltsc during the nmctccnth .
11
11td
. mono t lt.: lf'- IC \
Kmgdom '
1
:::- I th ' lccctn o f the long-run L'l' Onomt c )f. onh
)\\ .... tmcwiiiH! \\It 1 t.: - . t lh trad,
Ill . :::::: : h lmt \\Cclk. ICC \ L'Ct or clnd lun' t \I .
. I . bmnc p , . . 1 . . . . . . local
t10na m .
0
lt' trto _ another carl) tnc ustn,llt stng rcg
1011
and .
d r"' oional r ' . . Pto\ tnce
an t;::: , punu to effect a tram.tttOn t O\\ urds a lcarnmg rcnto .
ithin Canada - attcm ::: . . . . . c. n tn the
" . .
1
.... )rwmtc integratiOn, mcrcastng compctttJOn bctw 'e \
.. t of contli1C11ttl t.:Cl t.: n OT1h
cont<:\ . . , . and go\ crnmcnt and governance in the l .
American rcgJon-st,ttt.:s . . . . . anadlan
....
1
. \ ' tlk\ is a n:gwn of Caltforma m the Untted States th
federal v, rem
1
Jcon ' - . . at has
. d , <' rowth from its post-\\ ar mdustnallsat10n based upon maint .
C\pcncnccd en unnh . . . amtng
. . n hioh-tcch grO\\ th and capac1ty for innovatio
it Jcadmg po ttton t ::: .. n and
. I orial wd spatial dc\elopmcnt and the challenge of su"taining h
lcammg. nequa "' ' . t e
\ II d
"I dominHc 1b local and reg1onal de' elopment concen
1
s
Silicon a C) mo t.: '
FoliO\\ mg raptd mdw .. tnalt au on. Busan has expenenced relatJ\ e decline in the
hadov. of accelerating growth and the sharpening of regional inequality j
1
South
Korea. A nc\\ commitment to balanced national development' and the prorount decen-
traii arion of the m!>titution of go\ emment and governance is seeking to ad('rcss the
local and regional de, clopmcnt gap . Ireland emerged from a period of econom
1
c crisis
to experience , ery high economic grO\\ th rates from the late 1980s the ( elt
1
c Tiger
phenomenon - regulated by national social partnership. Sharpening social and spatial
inequality has rai ed que about the sustainabiJity of this local and regiOnal de\'el-
opment trajectol). In pam. Se\ ille has a long history as a n1ajor city of Andalusia but
it growth traJectory ha!) been marked by economic and social under-pcrfonnancc since
the 1980s. An ambit10u de\ elopment to transform Sevi lie into a 'technocity'
- the california of Europe - on the back of high-tech-led development has floundered
and reinforced unc\'en ocial and spatial development. In Mexico, the State of Jalisco 's
industriali!>ation had pro\ ided a industrial base prior to faltering in the 1980s.
In the context of continental liberalisation and integration within NAFT A. development
has re\ i'ed through the support of indigenous industries more embedded in the local
and regional econom).
North East England: coping with industrial decline
\orth East England is 1 1 . d
a c as::,1ca example of an mdustnal region wh1ch expenence
laroe-scale social d . .
. o . an econom1c change 111 the final decades of the t\\ ent1eth centuf).
Snuated m northern E 1 d h
. , ..ng an and adJacent to the Border with Scotland (Figure 7.1 ), t c
reg10n s growth fro th 'dd h
. .. m e mJ le of the eighteenth century to the end of the ninetcent
\\as ltnked to the ind
.. . , . . of the \team age. By the end of the t\ventieth centul),
anything \\' I fi f .
b , . .... <lS e
1 0
these mdustrics. From the 1930s onward, the North East
ecame a pohcy laborato ' h , . . . . but
non ... of h' h ry " ere succesS I\ e regional mtervent10ns were tested,
t.: \\ tc ha\ e arrested h 1 d that
decline accclc t ...
0
. t e ong-run relative decline of the mdee
ra c m the last d , . d f . R b son
1989, 200? fJ M T cca cs
0
the twentieth century (Hudson 1989; o tn
- ' reasury and Department of Trade and Industry (DTI) 200 I).
,.
LOCAL AND REGIONAL
DEVELOPM
ENT IN PRACTICE . -

..
,.\rtanti c

' oceall
SCOT LA:\ I>
NorriJ
S e a
krlometres
,
I
_....r
\. /"'\
I ' I
\.,/ '-)
R EP UBLI C
OF
IR ELAND
200
\
, .
.

I
Ed nburg\
..I\.
>
I
I

:., York hue and

, Humber
,
,
\ . -\
t,
. ,_ . '
' .
( ' I ' .,,.,._
Jf
'
...__,I(Cardtf!
\

' ,
I I I
' '
Soulh West
,
' I
I

Figure 7.1 North East England, United Kingdom

East
Historical growth and legacy . h' \!lddk
. . . wt trading centre dunng t t,; ... ,
The City of Newcastle upon Tyne '' as an tmport, al teenth ccntuf)
A . . 'd 't h from the et.,
1
1 I t'r
ges, but the North East regton s rap1 . . . This close!) (.; l:
from the development of ' carboniferous capttall sm . I ,.kng shipbutldtng.
f
. . . . . d (later) ma ' 0
tndustncs comprised coalmtmng. tron an
,.

t
INTEGRATED <\_
. 1 , unuHlcttt r(' of rai h' cl) locomott' lnd . .
.., t J JllcludJTH! lilt: m . I 1 .trrn,llll,
cneinct:nll::- -
1
b , uu ector. grc\\ tng t 1c n t the t'\J)'lfl t
- i b\ a loca ,ltll\
1
:::- - ' < tng Br
un<krprnnc( c \ tl L
1
st " 1-. a leader tn steam age tcl: hnologtcs tl\t
1
ltrsn
. d, .. f the cr l c .... oug lo
Emprrc. In t:d
1
h, fi rst dC\.\'l(k of the t\\ entteth ccntuf), f ul h on, ttt the
. , t1 ccntun . n t t: c
ntnctet:n 1 h, htpbuildtng tndustr: \vas produced on the banks of tt , . of
I b l 1tput ot t t: - h:
the g
0
a . , . the 1\ nc, \\ car and Tees (Hu(L on 1989). 1 he !ega,
h , ,.. pnnctpal ll\ a-. . . . J '<.:\ ot th
t n:t: h d'tiontl md often wdtgenous tn(JUstnes Imparted n stro d e
d minance ot t c tra 1 ' ' . ng cgrce
0
d upon the rei! ion s subst:qucnt de\ elopmcnt traJectory. fhc ....
ofpalh dcpcn cnC) ... , region's
(.
1
,
1
'd to the c,p,u1sion ot urban such as ewcastlc d
gro'' mg popu at tOn c . . . . . n erland
.... b h und 1 pro11tcrnt ion of mtntng commumtws m the northem c lfi
and \ fld es roug ' . ,. .,.. . oa eld.
d t
. th .. ninctc(.mh ccnturv. h O\\ C\'cr, thet t: was e\ 1dence that the f" .
B' rhe en o c . . . . . . cgton 's
. d t e. ,, ... r .... lo mg thetr compctltl\ en e ... s m the face of dechnmg prodttct .
ke} m us n t.: -- ... _ ''tty
I
lootcal and nc\\ mtcmat10nal fonr1s of competn1011 Con
1 Je, c s. tet: no :::- l .... , . 1ro of
h b
, o ector tn the '\orth f a"t began to mo' e out of the reg1on to London .
t e .... . . . . . tnte-
granng "ith the capital m the Ctt) and loosenmg tts links With local and regional
indu trie .
During the period between the F1rst and Second World the weakness of the
\orth East's indu. tnal became apparent. Within the context of a global depres-
sion. co11apsing marl\et for coal and ships in particular led to the emergence of mass
unemployment and social conflict. The North East became defined as a ' problem region'.
The British state e\ entuall) re::,ponded to the crisis with modest experiments , 1 regional
polic) inYOl\'ing the pro' i ion of new factory space and incentives for films to locate
in the region. In parallel. local and regional institutions of capital, labour, the local state
and ci\ il society began to fonn regional organisations to represent their interests. At
the arne time. a debate began concerning the appropriate forms of go\ ernment for the
region. '' hich focu ed on the need to mo,e beyond a highly localised and fragmented
fonn of local go,emment (Tomaney 2002).
During the inter-,,ar period. the technologies and industries of the post-steam age-
'' ith the important exception of bulk chemicals in Teesside - tended to develop in other
regions of the Lnited Kingdom, notably the South East and the West Midlands. It was
the onset the Second \\"orld \\'ar which proved the region's saviour as the demand
for coal. shtps and annaments increased and was sustained into the 1 950s. The owner-
ship structure of industry changed during this period under an interventionist national
Coalmining was nationali sed in 1947. Later. the steel and shipbuilding
Industries were also t k d
. a en mto state control. rendering the North East a state manage
region. (Hudson 1989). \Va\'es of merger and acquisition activities saw control of local
mdustnes shift out of th d
(\1 I I
e rcg1on. usually to London southern England or beyon
ars 1a I 1978 Smith 1985 pk ' f
" . .
1
e 2006). From the 1960s onward though, the pace
0
n.:structurmg qUickened C
1
. . ' h
d t f . oa mmmg contracted first in the 1960s and then folio" tng t e
e eat o the mtner . trik" . 198 .
Simi! m 5. Tens of thousands of jobs were lost tn the sector.
ar proces!)es affected st "''"'I k' . rter
of the twcnt" th ma mg, sh1pbutlding and engineering in the last qua
tc century often . d t te
policies Stat . as a of the interaction of n1arket forces an sa
c ownersh1p 1 h . . 1
employment l . d b a t ough ongmally conceived as a means of safcguardtng
la ccornc a mcch (on
of the basic .1 . cllltsrn of retrenchment and restructuring. Pnvattsa
1
muustncs, as pa
1
f h . ,
r
0
t e free-market' policies pursued by the Conservatt' e
AND REGIONAL DEV
ELOPMEN
. T IN PRACTICE
, .
1111
l:nh of the and I 99th. \ tgnallcd tl .
co't'' I lchnalrunl
. often dl!\,1'\tatmg ocal g I I .I town of these c t
rurll" Uuson 198l) R . :-; c ors and
I
Jl)99 Jnmancy 2003 ). ohtnson 1989 T
l' / o ' . . . omaney
r l
effects of contraction tn the
1
-: .
1c . were b
. ' the 1960-., and 1970s, succcsstvc national ' , set y two processes F' .
dtutng . . gO\ crnmcnts 1\ . trst,
. crocconom 1c approach to nat1onal demand-tn-lnagcm ? owmg the K.e) ncshn
Jllcl . l
1
. . < cnt outlmcd Ch '
1
an extensive reg10na po 1cy a1mcd at tackling th, b tn aptcr 3. opcr-
Ct tCl . c pro I ems of l ,. .
I
North l:. ast. In general terms, thts policy '-;OUght th, , . aggtng reg1ons like
t tc . . 1ca \ d. .
vt h through both restnct10ns on development in f , . rc tstnbution of
gro' . . , ast growmg a!"' d . .
f
.. firms to invest tn designated development areas, \l ' 'tl .
1
. an mccnttves
or . . ,, I lrc att\'c}y hi h rat .
1
ymcnt swclltng the labour pool and depressmg wage
1
, I g cs of unem-
p o .... C\ c s, cxoucnous d I
as ought as the North East became a focus for mobile fo f c C\'c opmcnt
'" . , . . ffils o manufacturi "'
mcnt. espectally for labour-mtens1ve act tvtt tes owned bv UK ng
. . f . " and US compamcs
\ longstdc the restnlctun ng o manufactunng. the region b"' fi d
. . . . . . . \.:ne lte from the genera\
g
rowth of sen tcc t ndustttes ht ch emerged as an mcrcasinQI , . .
. . ..... ) tmportant provtder of
employment. The growth of sen tces m the \Jorth East. when compa d h .
. . . . re to ot er regtons
O
f the Un1ted Kmgdom, rested dtspropotttonatel) on the expansion of th bl '
. . . e pu tc sector.
O
ften through state-dtrccted rclocat10ns of ctvll service J'obs while bus'tnes . "
' S SCf\'ICCS. 10r
instance. tended to be. 1982: Robinson 1989). Shaped by
the urban entrcprcneunahsm d1scussed m Chapter 4, physical of some
p . g tock abandonme
late 7.1 Decay In an old Industrial region: housm
5
nt in Easington in North
East England
Source Ph
otograph by Michele Allan
INTEGRA_!ED APPROACH :_ ES:,_ _____ _
bl
th, '\ e\\ Gntcshead qua) s ide " ,
1
, .
I
, enion noW t :-itgnth.
parts oft lt r ::: f tl , ccntut") . Propcrt) de, l'lopment . '" t:lnt
at the turn o lt.: .tnt cult
' . . b
11
con: hdpcd to alter the e\.tct nal .
11 1
lire.
, twn 10 th JS ur a . ' lt lln.tg,.
kd rcgcnt:r , . J, but de' clopmcnb tended to dn crt .tttenti t' \:of
, h Ea. t or t.:. . . . "' , . on ron1 tl
tht.: \ ort . , c . tnd , 0 c1<11 entrcnL hcd tn the region
1
1e
. undcrh 10'7 \\ card1 ss ' d
chrolllc ., 100-+) ... ,
. n 2002; 8) rnc and \\ - . . . , . .
(Robm
0
, crielll'Cd tmportant cconomtc changes dunng the
1
.
The 1\orth t.: ' P . '' erutcth
I
.
1
.. in terms 1ts \\ca1th has gro\\ n and. in 200S .
ntury Howe\ cr. '' H t,; ' lis unem.
cc ... b tantwlh ltn\t'r than 1t had been 111 the 1980s, it s pia,
P
loymcnt rate \\ as . . . . . . ' ce at the
f h
onomtc and soc1,1l hterarch) of UK t cgton. was contested
0 1 bottom o t e ec , . ' . . n } by
- -
1 1 1
The rcuion has faded to pace '' tth the grO\\th m econom.
\ orthcrn re anc. ::: ..
7
1c pros-
. . rh-- Enc,li!>h contc\.t (ftgurc .2). The orth East had the IO\\est Inc
pcntv tn t.: ::: :::- . ome
h
. d taincd the Iaroe t proportion of communttJCs WJth multiple forrns l d .
per ca , con ::: . , cpn.
\ation, the t of cmplo) ment. levels of educat1onal attatDmem.
the
10
,,est rate of and. sttll. the htghest rate of unemployment. For the
Ia t thirt) years of the t\\ cnticth ccntut;. the region lost population Treasul) and
DTI 200 I).
Foreign direct investment and the branch plant economy
Reflecting the outcome of pre' ious exogenous-based reindustrialisation strategies)
patterns of merger and acquisition and the constrained nature of the growth of the !>en ice
ector. the l\orth East can be \ as a cJassic 'branch plant economy'. Despite the
of the manufacturing base. the 1 orth East continues to derive a hi gher propor-
tion of it GOP than mo::,t LK regions fron1 manufacturing output with err ployment
concentrated in e\.temally O\\ ned firm (Jones and Wren 2004 ). Bcde\ illed by the issues
23,000-r------------------------,
21.000
19,000
17,000
15,000
13.000
11,000
9,000
7.000
--England
--- South East
-- East of England
---- North East
---London
Rest of England
-
--
-
- .,. .,... .; ,. .,.
--.,... --
,.- -- ,
, -- ,
,..,,..,""" ------- ----
..... ,. -- ---
...,.,. ...,.,. .......... - - -- ...-
.... - ---
.... --- _ ..... , --
..... .,.,. -..... ...-
......_ ---- -_.
..-- --- --
--- --
-----
----

---
----
-
-- --
5,000
1990 19911992 1993 19
94
1995 1996 1997 1998 1999 2000 2001 2002 2003
Figure 7.2 GVA per head
Source: Offrce for Nat ' English regions, 1 990-2003
' ronal Statrstrcs
LOCAL AND R
EGIONAL DEVELOP
MENT IN PRAC
, tct ing und etnbcdding exogenous rcsour , . . TICE
ol nt tt' . . . . . ces outltncd . ,
t 11
.1, been the mam tndustnal poli cy lnMrun n Chapter 6 in ,. d .
' . . 1ent for local . \\ ar Invest-
. I .. orth l:ast lor decades, 1th the airn of . . and regional d , I
Ill 111.: . f fi . . creatlng JOb . e\ e opmcnt
The prov tston o nanctal mcenti' cs U\ p s and u ,
JllCill. . an of renj . I . c:-
h
. s approach. L:. qually ttnportant been the d' , Po hey has been
tn 1 1. . . ., . . 15ttncttvc .
0
c , central
f
ucccss1vc nat tOnal governments. mvoh tng mini .
1
. P n door policy to FDI
o s I d . d . ma monttonn f
uiremcnts p ace on mwar mvestors and the cvot t' go the performance
rcq b
1
. u ton of a light
k whi ch makes ot 1 mvestment and di vestment \ regulatory frame-
wor . . . re cltl\ ely easier d
. omparati ve economtcs m contmental Europe WI .
1
an costly than
tn c . . ll e maktng the . .
or internatiOnal mvcstors such as Black and De .1., N. tCgton attractr\'e to
rrHlJ . , c"'er. l ltssan <;ie
.t renders much of the regton s manufacturing emplo\.'rne t l and
1 J n vu nerabh. . .
L
rge investors, such as Stemens, opened and closed rna f: . '
0
rattonahsatton.
a . JOr actonc:; within h
f time when confronted wtth sharp and unexpected d t . . . a s ort space
o . . c enorattons tn produ t k
onditions (see Chapter 6, see also Ptke and Tomanc\.,
1999
. L c mar et
c J ocwendahl 200 1 0
1
2
oo3: Phelps and Waley 2004). , aw ey
Openness to FD I was the halln1ark of the free-market pol' .
. tctes PlOneered bv succc _
S
ive Conservattvc governments between 1979 and 1997. Howeve
1
.
. . . . . r, ec 10mg the concerns
about balancmg and hnk1ng mdtgcnous and exogenous local and reg
1
d
1 . , . . tona eve opment
interventiOnS, the Untted market-led philosophy and belief in
the unequi vocal benefits of mward mvestment resulted in an industrial policy which
made no attempt to link FDI to the competitiveness of tndigenous industry' (Loewendahl
2001: 335). Surveys of local linkages shO\\Cd that despite the processes of extemalisa-
ti on, branch plants in the North East were poorly integrated into the regional economy.
refl ecting the deep functional specialisation and mtcgration of the region s manufac-
turing industry into an increasingly international 5patial di\ ision of labour (Phelps 1993:
Loe\vendahl 2001 ). Simil arly, there is little e\ idence that FDI sti mulated the de' clop-
mcnt of private sector R&D in the region (Loe\\ endahl 200 I). '' hich contmucs to
perform poorl y relati ve to the rest of the Gnited Kingdom (HM Treasur) and DTI 2001 ).
Service sector weakness
The continued relati ve importance of manufacturing draws attention to the enduring
. . . d d ated cconom)' in the North East.
weakness and partial trans1tton towar sa sen 1ce- ommc
Business services are unevenly distributed throughout the United Kingdom. but arc
h. . s a ftmetion of the branch
especiall y under- represented in the North East. In part, t
15 1
d
1
. Th , b e of locally headquarterc an<
plant character of the n1anufactun ng sector. c a sene .
1
f b si-
. h t nities for the gro\\
1 1 0
u
strategic decision-making funct ions restncted t e oppor u . . , hich
Th
th of financ1al sen tees. \\
ness services in the region (Marshall 1982). e grO\\
11
d th de, elopment
d b
t hich also fue c c
generally favoured the South East of EngJan u '' d at a lescr
f
. . . d Edi nburgh. occurre '
o provmtctal centres such as Leeds, \lfanchcster an , d adept at attractmg
rate in Newcastl e (Gentle and Marshall 1992). The i\or
1
h Ea!>t prok\e Q\er 4 per cent
t 50 000 ''or
Investments in call centres in the late 1990s. Almos
1
,ed in call
f
. . . .
1
. , c were emp O) . ,d
0
the reg10nal work force twtce the nat 10n c1 a\ crag
1
owe' er rep
. ' , , -- mploymcnt. 1 .
In the North East in 2003 (DTI 2004). Call centre c , 1 prodding nuunly
. b. ch plant cconom)
many of the features of the manufact unng tan
'
203
I

APPROACHES
fi\TGR.\ TED =--- .
- .
1 1
)osch n)otcd m the n.:gton (Rt ch.trdson ('/a/
200 . b d on \ l . .. . 0) lh
routmt: ro Jfl :::- , d pcndcncc on public sector cmplo\ rncnt fL'Ill t e
. . d proporuondtt: t: d ' lllLd. Fr
\ orth [a:-t . , l()\ trnmcnts Jcccntr,lltsc ct\ II sen tee 'b h:k .r:fi 0111
Js b . ' 011 1Ct' b
the 19"70s on'' .ln . . . lh ret umng el OcLupntJOns tn l on I Jo s
h l st. ''htk gcnL'f,l .. ' ... ... .. . . ton and th\
to rhc \ ort a. t. i 111 Ch tptct ..J. ' ' a\ of pt t\ at t .... atton. . l'
't "'t1\'Cr as "c no tl , . "' <ltton' tlnd
' ort: . bl . tl)r ot go' <l nd go, crnanc t I
. n the pu lt "'t." . . """ '" cnt cd
rcstructunng
1
. ,
1 111
the \ orth last a ruurme ,10bs \\ ere <lut omatcd or c) to
t disproporttorwrt. l l ntractcd trnpac
out (.\1arshull eta/. 2005)
. g local and regional institutions?
Strengthenn
. . th ... J910' politicnl m the North cast has questioned , h h
Periodtcall) 'mce t: " . ' ct er
t. 1 c"' l l 11 -' gl)\cmancc are surted to the task of promo n t..
rhc tmcturc o L) ' " u :::: .... g h1e
. . d . Jopnl "nt The notwn that the '\ orth Eac;;t s governance structures \'
1
.
11
regton ::- C\ e c , .
':" d .. otnu tile Jd 1ptation of the regiOn s economy and n1anagmg land-usc pia
u1te to p10m ! :::: , . n.
. h . b "'n 3 and theme. In the 1960s and 1970s, the expanston of nme a:> et: .
Ke) ...ne ian redt tnbutl\ c rcgwnal pohc)_ \\as accompan ted the creation of ne,\
regional planning These bodtes t.hough by and rernamed
accountable to national go\ cmment and had little executive authonty. In the late 19lOs,
the fir t eflorts ,, ere made to de\ elop a coherent regional plan, but these were halted
with the election of the Thatcher go\ emment in 1979. Thus. in common with other parts
of England. the reg10n' go\ emance \\as characteri sed by fragmented and periodicall)
restructured local go\ cmment and a grO\\ ing tier of regional organi sati ons that were
large I} accountable to central go' emment. \\ hile this witnessed the e5tablishment of one
of the reg10nal de\ elopment organisati ons in England, 1\orthern Development
Company. ib mitial rem1t to intcnsi fy the strategy of exogenous de\ elopment based
on attractmg FDI. Another feature of the region during the last half of the twent ieth cen-
tury was the polit ical dominance of the Labour Party at the local and national parliamen
tary le\ el. Thb pro\ tded a degree of continuity. but unlike the Commun1st mfl uence in
Emi lia Romagna d1scusscd in Chapter 4. this did not provide an ingredient for the cmer
gcnce of a successful regional productivi ty coalition' (see also Tomaney 2002. 2005).
The idea that strengthenmg regional mstituti ons was a necessary ingredient in efforts
to tackle inter-regional mequality and the plight of lagging regions like the North East
\\ as taken up by the \e\\ Labour go\emment in 1997. The new admi nistration insti-
tuted a programme of de\ olution to establish the Scotti sh Parliament, \Jational Assembl)
for \Vales and legi slatJ\! C assembly in Northern Ireland. There were multifarious pol it
leal and cultural factors that led to the adoption of thi s programme (Tomanc) 2000). In
England. the focu wa ...
1

11
. ,.. - . 1 h of
crt:asmg coordmat1on and effcctt , eness of the p et ora
government aoencies alp-d , f ntv
. } operatmg at the regional )eye] and the creatiOn o pno ;
reg tonal de\ elopment u , R .
d ( DAs) m e\ery part of England to lead the economic
evelopment agenda Tl " RD \ . f he
-- : s arc agenctcs of central government, rather than t
reg tons themsel re 1 h . . .
fi a t ough together With regional chambers they dtd pronde space
or new actors to cnga"c i u . . .
Fcho
1
n pohcy-makmg (0 , Bnen et a!. 2004). .
JOg t lC new regiOnalist o d 1 orn1c
pcrforn1' . RD , . doen a ot ra1smg regional and thereby natJOna econ .
tt ncc. As were m ft ktng
s
1
Uk m prosperous as well as Jagging regtons, brea
-==---- L OCAL AND REGIONAL DEv
ELOPMEN
. T IN PRACTICE
I
.
11
ost-war rcg10nal policy tradJtton of
0
-. . .
,d t h t lt: . . , , .. . .. , , 'scnm, natory .
t for at cas ( of ( o1111110 1h
2003
. , and selccttve insft .
.,uppot fi I S , lotheroill 200 I Uttonal
1,111 , ely mon:: power u cottt \ h Parl h nvnt (P'k 5). In th" h .
1 of a n: ' . ' "' 1 e 2002a) \.: s auow
. . . 1 sdtlcment for the regton grc\\ amon th demand for a de
1
)t>llt tC<t g c North F , vo ved
I al to create an elected rcg10nal in th" , ,
1
, s political clas A
rropo'> . "' ,, ort 1 t ast lb . . :l.
, "' ' lS rejected Ill a referendum in 2004
1
hi
1 1
. 'a ctt with very tnode t
po'' ' . . s c t the re ,. . s
. I coul d become the focus of ' de, clopmcnt coal it ' gJ_on Wtthout institutions
\\'htC, . . tons (Keattn, .
for the basts of a developmental regtonal \tate' co . 2003) or. still
less, . . < R1am 2004) h'
. sed in Chapter 4 are associated With succes .. f
1 1 1
w tch - as we
dtscus u oca and c
1
I
,l1crc in Europe. r gtona development
G SC\\
The North East faced profound challenges at the start f th
. . o c t
. 1 economicall y weak and pol!ttcally margmal region in t' U rs century. It
IS at ne K context h
1
.
' idcnce that the development gap bet\\ een it and the rest of the U . . . ' Wit Jttle
c h ., f . mted Ktnodom was
losi ng. Nloreover, t e pen s o strategtes based on exogenous d ,
1
.
c - h c e\ e opment dt scusscd
. Chapter 6 meant that t e 10rms of compcti ttvcncss that had d . .
1n . . un erpmncd tts devcl-
ment through the attractiOn of FDJ m the second half of the t . h
op . . . wenttet century were
bel .no eroded as cost-sensttlve and often labour-mtcnsivc manuf:actur d .
o . . mg an mcreas-
oly sen ice-onented tnvestments were made m new locations such C
1
m,:, . . a::, entra and
Eastern Europe, Chma, I ndta and other parts of Asia. The limits of the national strategy
of the previous decades were revealed:
The key historic location advantage of the UK has not been its technological
or skill infrastructure, but rather institutional openness to FDJ and new work
practices and cost advantages connected with lO\\ relative labour costs and the
a\ail ability of government incenti\es. 'A hile FDI in the UK b likely to be asso-
ci ated with organisation innovation, as \t1 i Cs like Nissan introduce new work
practices and supplier relation5. flexibi lity and cost-oriented investment moti-
vati ons are unlikely in thcmsehes to lead to technological innovation and inte-
grati on with local industry.
(Loewendahl200l : 337)
The region has been left with a constrained indigenou<; industrial base. little in the .way
h
. h t 0 ate and promote adjust
of technological and skill-based advantages upon \'- 1c o mn ' . .
. .
1
d EU local and reg1onal pohcy
mcnt, dwindJino and increasmgly selectJvc nat10na an ...
0
. .
1
d al oovemment and govcr-
suppon. and poorl y confi eturcd instttut1ons of loca an regJOn o
1
. ,,.,
1
,
5
.
1
rospects appear rc atr\ t: )
nance. North East England' s local and regJOnal de\e opment P
bleak.
1 tegration and the
Ontario: economic adjustment, cont1nenta. n
limits to learning in a North American reg1on-state
. . . the economic motor of
0 . . ( ' d The pro' mce IS . p I
ntano rs the industrial heartl and of ana a. f c , da\ total GD
. . . d 40 per cent o ana . , t
Its national economy accountmg for aroun
1
. .
1
ational dcvclopmcn
' . . . II Cana< a s r ' . , . . I
employment (Wolfe and Gertler 200 I). II lstonca Y. . h cd Ontano local '111t
, . . . . . h British Emptre ap
strategy and Its privileged pos1t1on w1thm t c

. 205
APPROACHES
INTEGRA_! ED -
. Lnttcrh. the rd,ttionshtp "tth Unth:d
tr'lJCdOn
4
l,II(', h
onal dc,dopmcnt 'J I t.t' "llh dommnnt. c. pcctclll) g l\ l'll tl 'h
n;gt ' II uw po I ._ , . .. "' Pro
,- ne economtcct ) ' .. I tom1 of po-;t-\\ ar th and \,
'7 "' The pttr1 I l: u ,t r . , .. . , , . \: nenccu
. (ftgurc .J ). . 'tl' ,1 k''<lC\ of udm,ll I lflcl ud, b
tnltt) ..
1
, nn 111cc '' 1 , :::- t: d ranch
b Ontario has left t P. , ,
1
)f ncrshtp, undcr-tn, cstmcnt Ill R 't)
) to htgh fl:H t .. . . (.X and
!ant cconorn) due - th comparable . ktll s clnd ptoductl\ II ) rdatl\c
P' , tor labour "
1
. . to the
a "age ad\ antclgt: . t t -pro' idcd so eta I me I udmg pub he health
' d matnh to s a t: . . . care.
1 nitcd tatcs Ul: ' . . prO\ incc "1thm the Canadtan fedcratton
v Ontano .1
I
ooYcmment terms.
d t learning region?
From industrial heartlan o . .
0
a sustained pet tod of ceonorntc res true,...
l 19 ntano l . lllr-
From the car) d t' ,
111
llcnocs "e introduced tn Chapter 1, globalisa tO;) tech
. d b the tn o l ' e " . -
mg tnggere ) . fi ...
0
ompctition, each of whteh process has been acLdcrated
I hanoe and mtcn-..1 t.: l
nologtca c. . th the united States (\Volfe and Gertler 200 I). 1
1
c earl}
tC mleuratton \\ t .
b) econom . e l decpc t the 1930s Great Deprcss10n. \\ orst;ned by tight
1990 rece swn \\ tL t lC
.
1
. 1 nh rates and currency apprectatlon, a ne\\ Federal \'alue
acroeconomtc po tC). 11= . '
m . b e C\ 'Cie do" nswing. Ontano s output contracted by '.8 per
added ta.\ and a L ustn J . f: .
'
00
b ere lost almost two-thuds 1n manu actunng, unemployment
cent and 320,0 JO ''
0 t and in\ c tment collapsed (Wolfe and Creut7berg 2003 ). Amidst
rose above l per cen
:._
<Rl st.\ '
r-JFLDER.\
Arctit Ocean
0
I
Padfic
Ocean
I,
0
t \IT0
' T,\TES I
rJiorr.elles IQO\i
I 1
l"\ITED STATE S
Figure 7.3 Ontario, Canada
Ont a rio
G r eenl a nd
( DF. i\M ARK)
\
\
-,
, _ .

'
II
1 ... , ,
..., I\ ,
Quebec
' . ,
', '
.
AtlantiC
Octall
J
AND REGIONAL
DEVELOPMENT
IN PRACTICE
1400000
1200000 -
-0
0
1000000
g.
0
8
ooooo Vlg
..
c:: 0
600000 o.g
.;.1 ..
400000 t ><
200000
B.
0
0
"
--- -- --
- ' l
<O<O<O<O<O<O<O<O<O<O<O oooo
Ol<O<O<O<O<O<O<O<O <O <Oo ooo
Year
--Canada
--Ontano
- - - Quebec
--- - Alberta
- .. - . British Columbia
Figure 7.4 GDP at market prices (income-based) for selected provln
1989-2003 ces and Canada,
. Calculated from Statistics Canada data
source.
a modest recovery in the late 1990s and earl; 2000s, Ontario's growth has remained
sluggish (Figure 7.4) and, while employment is growing in the upturn, unemployment
remains volatil e (Figure 7.5).
7000
6000
5000
Total Employment ('000)
2000
1000
0
1950 1960 1970 1980 1990 2000 2010
10 '\
8
6 '1
*
4 i
...
_ Unemployment Rate (%)
\/'v
3 1
2
I
0 . -
1950
1960 1970 1980 1990 2000 2010
Year (%) Ontario, 196Q-2001
nemployment rate o '
Figure 7.5 Total employment ('000) and u
Source: Calculated from Wolfe and Creutzberg (2003: 73)
207
os ' 2 .
I rEGRATED
.
1
. won and the structural shift tO\\ ards sen 1cc-.. r ,
ite dcindustrl<l ISc ' . l'.lled
Desp . , , cmplo) mcnt ( I able 7. l ), Ontano rcmatns
1
In
. rtion ot sen tct: . , . '
h1gh propo . . .. ')O per cent of nattonal rnanufactunnl?. GDP tn C lrtunng
I d roducHH! 0\ t:r . . ... cl114l(h ( \\
heart an P
001
) halfofnlljobs m the pn.n mcc arc tn n"'anufactunn, ' olfe
d Gertler 2 " h g. Altho
an . . , ith the Lnttcd tt as nan 0 ,, cd . llgh
1 oductl\ t t) gap \ . . clllltdst 1
t lC pr .. ..
1
During the latt.: 1990s economtc Cl), h1gh-tcch . ,
0
\\cr
.. lo\ ment It;\ t.: ... sectors , .
tnlP . t
111
d producti\ 1t) grO\\ th '' lule the O\ cra11 number of t.:\pe.
ncnccd htgh outpu ' ... . . lints and .
, r. d Gertler 200 1 ). Table 7.2 tllustratc. that auton1ot1\ c asscmbl Jobs
tell (\\ ohe an . . . . Tt , ( F d ) and ran
. . nufacturino pnnctpall) 1 he B1g 1rcc or , GM and Daimler ('I s
domtnatc 01c1 c =- . ... , . - 1rysler
tl
ancplant (Tovot,l. Honda, U/Uki-Gl\1), and the pro, mcc is tl )
and Japanese . . 1c
d Cer l
n \'oJ1h \ mcriccl after the US state of Michigan. nd
largest pro u . . .
LJ rrcal and producb. c pcctaJiy telecon1muntcations equipmc
c.;. cc 1 . . . n . remain
. rtant too Leadino hil!h-tech ha\ c been attracted (e.g. SJ1 1eon Vall, b
Impo = ... . . C\- ased
C
.
0
\stems) to tap into htghl) qualified. product1ve and, compared to th , _ .
I C ., C untted
Table
1
.
1
Sectoral composition of employment, Ontario, selected years, 1.955-
2001
Year
Primary industry Secondary industry
1955
13.7 38.3
1961 9.6 33.3
1971 6.1 33.5
1975 4.7 30.8
1981 4.6 30.2
1991 3.3 18.0
1996 2.9 17.4
2001 2.0 18.2
Source: Adapted from Wolfe and Creutzberg ( 2003: 7 4)
Table 7.2 Top ten manufacturing industries in Ontario, .1999
Industry
Transportation equipment
Food and beverage
Electncal and electromc
Chemical
Primary metals
Fabricated metal
Machinery
Rubber and plastics
Refined petroleum and coal
Paper
Total
All manufacturing indust .
Value of shipments
and other revenue
(CON$ m)
98,637.3
21,867.2
20,277.7
17,753.5
14,164.0
12.549.2
8.889.1
6,350.3
5,935.5
5,052.2
211.476.0
%Top ten
46.6
10.3
9.6
8.4
6. 7
5.9
4.2
3.0
2.8
2.4
100.0
Tertiary industry
48.0
57.1
60.4
64.5
65.2
71.7
73.6
73.1
% All industries
38.4
8.5
7.9
6.9
5.5
4.9
3.5
2.5
2.3
2.0
82.3
-
nes 257 033 3
Source: Adapted from Wolfe and C ' -- :_ _____________________ _
reutzberg (?.00
3
:
75
)


LOCAL AND
---- REGIONAL D
- - EVELOPM
ENT IN p
, rclnt 1\ cl ) lL)\vcr wage labour. Supp ----- ___ RACTI c E
. Orted b} . --
. . ng rnnny of the attnbutes of a stron, . . . a dense rcsca h .
nltnntt . . . . g tcgtonll rc mfrast
I
ologY i ndu-, tncs 10 Ontano mcludc R
000
fi. ' Innovation S\st . ructure.
lt:C ltl . l , . , t Ols and em, tnformat
, , I no logy 1 nang e around Cambndgc. Ktt
1
, employ O\er
300
. ton
rcc l ' . 0 , . c "'encr. Water! .ooo m th
. II")' orth 111 the ttawa-Carleton rcgton (l, b oo and Guelph. , . . e
\ a t.: . ll . ct O\ Itt 200". ' and Stltcon
003
). Ontat to, cspcc1a Y Toronto, 1s attractive " . j. \\ olfc and C ,.
2 . ll lOr htgh sk ll r-.:utzbcrg
da and intcrnat10na y. In terms of attract' -.
1
ed labour f .
cana . . . tng the exoge rom Wtthin
ft
erd by the crcatt vc class dtscussed in Chapter
6
nous resources pot .
1 o . . . . . recent res h entJa ly
..
5
respectably on crcat1v1ty mdt ccs with c't . care compares c d.
cttte ' Y-tcgtons in ana 1an
eta/. 2002). . 1 onh America (Gertler
Alongside concentrations of foreign O\\ nersh
0
.
. . tpl ntano has a .
ector of home-grown tntematlonal companies wtth h . d strong tndigenou
:, . ., . ca quarters and k
t'ons in the provmcc, 10r example m telccommuni t' ey R&D func-
t ca tons and aeros
Networks, Bombatdter). Indt genous bankmg is tmport pace (e.g. Nortel
. . ant too. Toronto .
cial centre nattonall y and thud after NC\\ York and S F . . ts a key finan-
. . an ranctsco m No h .
althouoh its relatt vely small stze, autonom) and nation
1
. . rt Amcnca,
o a onentatton . .
scale economies and an inability to promote indiocnous . d . . meant hmned
and Creutzbcrg 2003). b m ustnal adjustment (Wolfe
Local and regional developtnent in Ontario has focus d
. . . . . . . c upon the challenge of
adJustmg to dcmdustn ahsahon and promotmg the kind of i . . .
' . , . . nnovatton and shift to a
'learnmg econon1y capable of sustamable de\ clopmcnt discuss')d
1
n Cl.
3
(G
. " lapter ertler
1995 ). The a 1m has been. 'to promote the transition of the Ontario economy towards
those sectors and firms \Vtth the capacity to generate higher wage. higher value-added
and environmentally sustainable jobs' (\Volfe and Gertler 2001: 585 ). Changing from
the hi storical focus upon top-down, hierarchicaL nationall y-centred policy and hard
infrastructure in the post-war peri od of the kind introduced in Chapter l. recent local
and regional development pol icy has sought to build a more decentralised regional
inno,ation system based upon intersectoral cooperation, trustful relations and soctal
learning (Wolfe 2002). Mobilising indigenous and attracting and embedding e>.ogenous
resources are evident. Provincial government policy has invested long tenn in post-
secondary education since the 1960s and constructed a strengthened research base and
links \-Vith industry, upgrading exi sting manufacturing and. dudng the early 1990s, devel-
oping clusters.
Changes si nce the 1990s in Ontario's economy ha\e been profound but uneven .. Evi-
dence exists to support the role of poli cy in improving the quality. sophistication. ttme-
lincss and inno\'ation record of economic activities in the pro\' ince (\Volfe and Gert.ler
?QO . . . , .
1
d a fragmented pohc)
.. 1 ). Elen1cnts of a reg1onal mnovat10n system ex 1st a ongst e .
b
h dominant neo-IIbcraltsm
context somet imes lacking coordination. Influenced Y t e . . d. d 1
f ts Canada s m t\
1
ua-
0
the1r close neighbour the United States. tn some asse smen d rtic-
. . . . tc sector an pa
lSttc and antt-cooperati ve culture has mthtatcd agamst prl\ a . c 'ntral to
i . . l . b "d ocial orgamsatJOn l: '
patton m the high-trust relations and partners
11
P- ast; (L b itz 2003).
th . . d n Chapter 4 ct O\
e more assoc.attve fom1s of governance dcscnbc
1
. t ,, ith a
Chall d 1 cnt in Ontano as l '
enges remain for local and regional eve opm _, 'ific sorts of Jobs.
patt f . ., tcs fewer anu spec
em o growth that is n1ore productt ve but genet d

'
... --
I
2J;O I
4PPROACHES
INTEGRATED -
- t' and the emergence of a
1
tegra 1on
continenta . '"an region-state
rth
No _ J
1960
c,m.1da!> ,tt10nal Pla n cmbod1ed
I , <Ul<J " - de
Dunng t l t.: , , th , cconorn) to tree trade ,md the tn rnand
" t tnd opcnt.'u t. \
managetm.:n ' . .
11
. , Jnd manufacturing sectors ( \\ olfc illld Crcut b nHed
. ation of lb I. L / erg "">Qo
modem' L d . > JJCfJt ) di sproportronatcl) ht \ ourcd Ontano throt h ... 3).
ufO\\ th an . . ' tg I cd
Post-\\ ar :::- . f trnftsttJOn. patent and preferred tradinu
1
. k . era)
. rt -ub tltut iOn tnc L , ... In h
Jmpo , nt s of tht' Bnush Emprrc. l hts ( ,olden Age' reached . .
1
e
Commom' calth ft;TlUl J . . . . . Its I units
L rdl srn \\ c m Ch,tptcr 3 clnd tn the changing
'' jth the en b ot I o . . . . . econorni
.
1
.
1
d r"viotltlf ck\ clopmcnt. tagftat10n. mternat1 ona1J sation and c
conte\.t ot oca an ' O\ erca.
. . t' ,d compdit ion from the 1970s.
pactt\ lt: . . .
"'. . .
1
t . 1 deb Itc cen compctmg \IS tons of the state s role in the
en 1 sumu a eu . . . econorn .
. d
1
oltc\ tn the 19""0. and 1980s. m1rronng the tenston between n )
and m u tna P . . eo-c
.
1
d K" nc tan mterprctatiOn of local and reg10nal development di ..c .
stca an t:) . . . . ussed tn
Ch
.., Trad' led Jdlhtment trugglcd \\ 1th a more tnten entJontst approad t" d
apter J. "- '-' - , . . . . v e\ eJ.
. technolo(Jic JI o' crcJgnt) of Canadian mdustry, msptred by the C"per
opmg l L ... '" tences
of po t-war France and Japan ( \\ olfe and Creutzberg ): Am1dst the neo-liberal tum
in the intemauonal pohtical economy. the Royal on the Economic Lnion
and Oe\elopmcnt for Canada ( 1985) reJ ected mterventionism for a market-
oriented approach due to the openness of the economy, federal structure and
social structures incapable of fostering consensus. Canada subsequentl y sought free trade
and integration \\ ith the Lnited Scates. tight monetary policy and labour market reform
s.
Trade-led adju tment accelerated the global and especially US integration of Canada
and Ontario in an emergent \'orth American economy. foiJowing the Auto Pact in the
late 1960s. the Free Trade Agreement (FT A) in 1989 and its the \orth
American Free Trade <\greement \\ ith \!lexica in 1994. Trade and investment flows were
liberalised and cro . -border production net\\ orks expanded as indigenous Canadian
sought expan ion mto the larger and more lucrative US market (Wolfe and Creuuberg
2003 ). Exports and imports in key sectors are dominated by trade with the United States.
Ontano s exports to the United States account for around 45 per cent of 1ts GOP
200 I). Cross-border rationalisation has proceeded through mergers and
acqutslttons. forging links bet\\Cen Canadian and US and global firms (Wolfe and Gertler
200 I). generated by exogenous development, low wage and lov.: value-
added actt\ tties ha\ e been readily outsourced to Southern US states and Mexico in the
context of external control and foreign-ownership.
As part of \orth American economic integration, the 'East West' national Canadian
economy has been su I d b . . . . .
. PP ante ) a senes of. orth- South' cross-border reg10nal econ
between Can d d h U . ' .
. a a an t c ntted States (Courchene 2001 ). Ontario has rconented
Itself from a pro\ inc
1
. . .
ta cconom1c heartland and focal point for the trans-Canadran
economy to a \orth A . . . . .
. . . . mencan reg10n-state. bU1ldmg upon its c1ose geographical pro.\-
tmny to LS mark... "" . . .
T . . l:ts m the Great I .akes. Central to thts transfonnatJOn 1s Greater
oronto evolution from . . . .
glohal ct . a provmctal capttal with significant international reach to a
1
y-regton. Ontario d G. d
roles in the ' l rth A . an
1
cater Toronto are seeking to bui ld thctr broa er
'
0
men can i . . al
positions \\
1
th. C anc llltcrnattonal context while prcservmg their natJOn
1n anadn.
-
____ LOCAL AND R
,__....---- CGI ONAL DE
..... .. VELOPM
--- ENT IN PR
nt and g
-- ACTICE
. el governme overnance in th
federal system e
ca,adtan d. . .
ring to our m Chapter
4
.- 1 .
connt.:C . \\ ltr1Jn Canad .
. nmcnt and go\<crnance. the federal lc\cl re
111
. as multilavered
,,o,t.:r d h l 1 ( ains tmpon system of
1:>
1
prncnt. I ndcc , t e ate 990s economic , ant for local d .
de' c o . . . recovery owed an regtonal
mi c reforms and stabtltty (Courchenc
2001
) D rnuch to fed"
1

econo . cvolutio cr-tt macro-
rocccdcd unevenly but has mcludcd post . n to the provinc"
1 1 haS P
1
c G -sccondai y cd . I a cvci
ch funding (Wo 1 e and crtl cr 2001 ). ln
0
t ucatton and add' .
resear . n nno, provinci
1
. . tttonal
"en regiOnal and local government were profo dl a -municipal rei t'
. . . . un y reorgan d a Ions
ervat ive Admtmstratton m 1996 as it sought t h --- Ise by the inca .
cons . o en ancc the . mltlg
in a , orth An1encan context and wrest back provtnce's attractive
ness . power from P br -
H rd' services (e.g. property, mfrastructure) were shi ft'd u IC sector unions
a . c to the tnu . .
. .Ices (e.g. educat1on. health and welfare) to the p . . niclpaltttes and lsoft'
sef\ . . rovmctal level (C
1
t ' fO'O\emmen ta 1 coordmat10n remains thorny and t . ourchene 2001 ).
n c o . . . enswns continue b
Federal and provt nctal levels. Desptte de\ elution to the , . etween the
pro\ mces no smgl I 1
multilayered system controls all the poli cy mstrumcnts d d . e eve \\ tthin
a . . nee e to tmplemc t h
regional industnal stratcgtes (Wolfe and Creuttberg
2003
). n co es1vc
In the context of the economic chall enges of the 1990s r .
1 . . . ' po Jtlca change has com li
cated an already fragtnented tnstttut10nal structure in Ont'trio C . P -
' . onservatJve governments
ruled from 1943 to 1985, focused upon attracting investment . d .
an controlling public
expenditure and debt (Wolfe and Creutzbcrg 2003) The 1980s econo .. h
' . . . . . . mtc cnsts eraldcd
a period of polttlcal S\Vlngs and mstabtiity. Four different governments involving all
three maj or parties ruled from the mid-1 980s. In the early 1990s. the social democratic
\cw Democratic Patty' s (NDP) local and reg10nal development policy innovations were
orershadowed by the near 'fiscalamity' of the doubling of the pro\ ince's indebtedne-s
and triggering of successive cred1t down-ratings (Courchenc 2001 ; \Volfe 2002). The
market-oriented Progressive Conservati\ \\ ere elected in I 995 and 1999 with dramatic
consequences for local and regional development policy. As part of their 'Common
Sense Re,oluti on of public expenditure tax cuts and deregulation to stim-
ulate growth, the administration tcnninated the \DP's cluster development strategy
(Wolfe 2002). Following the publication of the Ontari o Jobs and Investment Board's
( 1999) A Roadmap to Prosperity. only in the late I 990s was there a belated recognition
of the role of public sector spending programmes and tax incentives to rene\\ the mfra-
structurc. encourage innovation and bui ld the knO\\ ledge-economy for local and regiOnal
development (\Volfe and Gertler 200 I). .
0 t
, . . une\en dc'" pite the cvtdencc
n ano s movement towards a Jeammg rcg10n rematns .
of in\'estment in research skills and education. Collaboration and networking contmue
b
. ' . . h . t of Ontano s mdus-
to e stymtcd by the individuali stic and antt-coopcrattYe c atac er . .
t
I . d ')tate tradttiOns. the nco-
na culture, tts weak oovemance and coordmatmg capaclt) an .
l'b
0
d t" ed under-mvcstmcnt 111
1
era! agenda of the current provincial go\cn1ment an con mu f
R&D I ?00 l) In the context ot con ,_
(Atkinson and Coletnan 1989: Wolfe and Gcrt cr- . . d forign-
ne tal . . . . . d t . n both domesttc an t; ....
n mtegrat10n, key industries are bcmg hollowc ou
1
. , allv US
ow d . k . tl c Cmadlan and e:,pClt
ne sectors. Enterprise remains relativel y tn
1
. ' . rt of indigenou.
come t 1 d f t ' r 111 suppo
x Jmlttng the effectiveness of the ktn s o
111
c \ t.: -
I
. . (
1
S. Toronto ranked tht rd bL' htnd \
. k'ntJht:d Ill 1c 1 . lllt'otl\'tr
de' dnpnwnt tl . . .
1
tlnam:mg in 700 I ( \\ l ) k and (
2
(){P anu
. . ntun: t .tpttcl . . '" ,) ).
\ lontr('.ll tot 't ron tmorH! '\orth n t) to lttr .
1 c0rnpctt
1
..... ' tt and
lnrcr-tcrnhont.l I ltlkd I,Ihour prompttnp ' , ,
. b' llld hw. t-:-." ..
111 , . .1 ' . f) ...ll hct:-. upon ( \llldtia prodtt<:tt . Phlc\!
. f . Onr.tno. u) ll \It\ sho .
111ar"cung or .
1 11
. lfld rclatt\ l' to the Un ited St.ncs (
1
. rtfall,
. (all ( 0 ell ' :::0 llstttut \ t'
rhc ftllltng ' ' r> nt\ \ s Courchcnc (?001 : 163) o . cOr
0 , ' ss and . - . ntan
0
p
Compdttnt:m:. .
1
. t jn [the Canadwn Pro\ ofl Bri ttsh ( l
0
rob.
k
, . iuc notKL' o ,l'- ' . . . .. o umbta
abl.v ta c . t-. . mon: L onccrncd about t a \. raks 111 i\tltchi gan Ohi and
. cotia. But I( ell . 0 ' 0, and Nc '
\.Jo\ a . d.. , ,
0
i tl t:n\ dope ts under pt essUI c as part o1 tno\ , \\
. The (ana ,,ln s l: ' .. , .... .... , . cs toward
\or . . If: r , 111 a dcrcgulatol) race to the bottom agam"t l S s
d
smantltng the \\L ,t L , . C , . . . , . states
1
j
1
nf Ont 1no " e on sen att\ c::; of stronger .
'in forced b\ the agcnc, ' .... . . ll1centl\es
n; " . und fi and public expendt ture restraint
1
t
tl.lr cntrcprcnt:ur .. o . . . 1e arena
, . . .
1
omncttttOn ma) ) ct be e\.pandtng further through Nonh, l em
1 ot rnter-tcrntona c r . ra and
. th , potcnti'll Free Trade Area of the \me c
outh Amenca m t: . as.
di 111 Chapter 4. the scope and capac tty of the publtc realm and .
. ' \\ e 0 . , Its
. . . ,
1

11
que"tJOn In context. ntano s governors ha\ e had to con c.
111 art: . 1ront
the local and regi onal de\ dopmcnt challcnge_s generated by the dtscconomies of growth
in it major citie . the urbani ation of its soc1al and the suburbanisauon of its
ta.\ ba. c (Courchcne 2001 ). A e\ idence of the gro\Vtng Importance of sustamable devel-
0 ment detailed in Chapter 2 and 3, the establ ishn1ent of ' Smart Growth' p,1ncls are a
t:ntati' e response the pro\ i nee. Criticall y, however, w hi lc Canadian cities are
usuall) politically weah. creatures of their provincial governments (Courchcnc 200l),
Greater Toronto s emergent role a5> a North An1erican city-region has stoked up demands
for further elf-detennination \\ ithm Ontario province and the Canadian Cot federatton
(Jacobs et al. 2000). In the context of regional tensions in province Federal relation .
Ontario faces its local and regional de\ elopment challenges in a tnore flextblc, multi-
lateral. negotiated and associati\ e - including state and non-state organisations -
multile\ el sy tem of go' ernmcnt and go\ emance (Wolfe and Creutzbcrg 2003). The
extent to \\ hich this much more complex institutional architecture promotes or inhibits
local and regional dcYelopmenL in Ontario remains to be seen.
Silicon Valley: regional adjustment, innovation and learning
Silicon Valley is a place of recurrent interest for local and regional de' clopment. As a
concentrati on of inten1ationall y competitive high-tech economic act i\
St hcon is an icon of successful growth and a powerful syn1bol of LS industnal
leadershi p and entrepreneuri al 5pirit (\\oa lkcr ] 995). from the 1940s, Silicon Valle} has
and retained a role at the forefront of the fifth Kondraticv or long "'ave of
growth as the crucible of innovati on and techno]ooical change in electronics
10
the tnformation a d
0

0
. s1 Valle\
n commumcatton technology industries. lli stoncall y, 1 1con :
centred upon Smt Cl C C li fornta
' a ara ount y in the San Francisco Bay Northern a
( h gure 7 6) The v. 11
1
. S Mateo
. d S a ey )as stncc extended geographicall y into Alameda, an
an anta Cruz c . . .
11
San
ounttes and encompassed emergent n1ultimedta act tVlttcS
1

San
Francisco
Pacifi c
Orl'all
L 0 C A L A N D R C: G I 0 N A L
<;:l
(\
6
0
Richmond
Berkeley
Oakland
'"t"l
-.
DEVELOp
__ """- M_"'E N T I N p R A C Tl C E
()rc on
I
l ' ' I
\
eSJ I Li({.
' c IJ I
I I
I
1
I tah
l) 1"1 I 'I F ll ll S . ',
1\tt-:s 1
I
I \
'- -. -- --. -.. -,
I I
I
I
. , } x
San 0
................
......_.
-
- San leandro
,.. .
. J.
Fremont
Redwood City
-
'
/
I
.
I
c 0
N
Sunnyvale

Santa Clara San Jose
0 kilometres 30
'- Figure 7.6 Silicon Valley, California, United States
199'\) The
, 0 d \11 rin County (Saxcman . .
Franctsco and softvlare fi nns m the Fast Bet) an a
51
,anning sC\ cral

0
t rial go\cmance, ' ...
economy of Silicon Valley is dissonant '' tth tts tcrll
0
0
"' 0
1998
) ln line" tth ceo-
.. 'bTt (Kcattn<
7

authonttcs with I imited political or cultural senst

1 1
Y . . f go' crnmcnt und
. . . . . f the lllStttuttOns o , I
nom1c change and I inktng to our dtscusston , _ . rntncc has cvoh l;(
Val leys go'c ' . .
governance in Chapter 4 Table 7.3 shows how Stlt con
1
llevd and an
h
. ' . 0 '>001)
t rough d1 stinct stages marked by elt te networks at s a . (Henton -
. bl. rtvatc partn
tng focus upon local and regional 1ssues and pu tc p

IN T G RAT 0 R 0 A C:.:. H.:..;. _S ___ =----=

d their form of regional governance In Silicon Valley
19
e 7.3 Economic eras an . . 50s
Reg10nal gol'emance --
:. Lassez-faire -
S
-enliconductors (1959- 1975)
Personal computers (1975- 1985)
Software (1985-1995)
Internet (1995-)
Source: Adapted from Henton (2001: 396)
semconductor Indust ry Association
Busmess-Jcd
Santa Clara Manufacturing Group
Collaborat ion
Joi nt Venture: S1llcon Valley Network
Networkrng
Si lrcon Valley Civic Action Network
FoliO\\ ing a downturn in the late and 20?0s. Silicon Va1ley increasea its
tock of fa t growing firm m 100-l for the first ttme smce 2000 and accounted for
10
per cent of all patent filed nation\\ in the .United States en.ture: Sil 1co 1 v llley
\'ct\\ork 2005). The \'aile) dl\ cr tficd mt:\ of sectors. spectaltsattons, firm s1ze!l and
indigenou and C\Ogenou O\\ ncrshtp are highly internationalised within
global export markets. includmg wcll -establ ished fi nns (e.g. He"" lett-Packard, Apple
Computer) and rapid grO\\ th start-ups from the 1980s (e.g. Sun M icrosystems, s Iicon
Graphics). The majori t) of in Silicon Valley are SMEs, however, occupying
speciali sed niches in intra-industry trade and representing the dynamism of indigenous
development described in Chapter 5. Ke) functions of headquarters, R&D and design
as well as production reside in the Vall ey as an example of regional industr ial rather
than functional spectali at10n \\ tthm the spatial division of labour. Since the
routine manufacturing has been out ourced to newly industriali sing countries (e.g Hong
Kong. the Philippines) and IO\\ er-\\ age regions of the United States (e.g. Texas. \e\\
vlexico) (Scott I 988). Employment in the core technology companies is over 350,000
and. as Table 7.4 illustrates. labour productivity is more than twice the national average
(Ba) Area Economic Forum 2004). fi rm fonnation rates arc hi gh, new business
starts added 166,200 fi rms while deaths subtracted 125,000 firms between 1990 and
Table 7.4 Output per capita, selected US regions, 2002
Region
0
.
utput per cap1ta ($ Thousands)
Bay Area, CA
63
.4
Boise, 10
Austin. TX
New York
Boston, MA
Seattle, WA
Houston. TX
Los Angeles. CA
United States
48.5
46.7
47.4
44.0
41.2
40.5
32. 6
32.7
Source: Adapted from Bureau of
mlc Analysis (BEA) cited in Bay Area Economrc Forum (2004: 6)
_ ---- LOC AL AND R
EGtONAL DE
VELOPMEN
. ,. . , . . T IN PRACTICE
1
( l oint Vcntu1 c. S1 1con Valley Network ?()() S
200... . S - ). \cw st
tlllrd of total L nat1onal \Cnturc capttll tn , . <lrt-ups tvpic,lly,
l)nc- . . ll ' . , vestment fu d. J , attract over
. ..,
004
_ Sdt<.:on V,t ey s cconom1c \ ttality und . . .n s. Worth overS? b' .
1
n ... . crptns rclat
1
v
1
1lhon
..
1 000
in 2004. per capt ta mcomc arc \ lgnr c Y htgh ,
))... . . I tcantly abov, h ... At
c. )? gOO) albett by a select group of tndlvidual . t e US national aver
1
u
t ) ... . s In fl.!CClpt of I\ 'oC
\cry htgh
I
ning Silicon Valley
EXP at
C nvcntional explanati ons of Si I icon Vall ey
o . 3(S 1988 . upon the ext ... l .
, "laincd tn Chapter cott ). Producti on has dis t ema cconomtcs
. c tn cgrated ve
1
f ll
enable flexible adaptatt on to market uncertainty . d . tea Y and localised
to an rap1d technol
(
Castell s 1989). Our other frameworks of undcrstandinu fl ., ogtcal change
o rom Chapter 3 o .
onorni cs (Krugman 1991) and clusters (Porter
1990
) . . . ' ocograph1cal
ec . . . Interpret Sthcon V H
classic agglomerati on economy, benefittng from the cumul f ,
1
, . . a ey as a
. . d . a t\e self-remforcing
cesses of mcreasmg returns an locahsed technological sp'll pro-
. . . . t overs. Other analvses
an archetypal mdustnal dtstnct (P10re and Sabel 1984) or the . .d ::,ee
comci ence of technolo
cycles and regi onal growth (Hall and Markusen 1985). gy
Contrasting the di vergent performance of Sthcon VaUev and
1
ts . .
, . .. competitor h1gh-tcch
reoional complex Route 128 m Massachusetts Saxcnian (1994) chall d
b . ' enge conven-
ti onal accounts. External economtcs assume clearly defined boundaries between the
inside and outside of the firm. Drawing upon the socio-economic approaches detailed
in Chapter 3, Saxcnian ' s ( 1994: 1) network approach argues that this focus neglects the
compl ex and histori call y-evolved relations bet\\ Cen the internal organization of firms
and their connections to one another and the social structures and institutions of a partic-
ular locality' . Finns are embedded in networks of social and institutional relationships
that shape and. in tum, are shaped b) their actions. Over time. such networks evolve
distincti ve industrial systems embedded in places:
Silicon Vall ey ... has pioneered a decentral11ed industrial S)Stem in which
firms special i1c and compete intensely. \\ hile collaborating in informal and
formal ways vv ith one another and with local instttutions, like uni\'ersitics, to
learn about fast changing n1arkcts and technologies. The successes of Silicon
Valley fi rn1s thus depend as much on being a part of local social and technical
networks as on thci r O\vn individual activities.
(Saxenian 1995: 2)
215
I
t reduce time to market
Such networks spread the costs of new technology de\ c opmen '
and enable reci procal innovation:
.. d .. d al fi rnls sktll cd
f 111 I\ I U '
Stltcon Vall ey is far more than an agglomeratiOn . t , that
. . techrucal commum )
workers, capital and technology. Rather . It a o ccial ist producers
promotes collective learning and flexible adjustment p , rks and open
. , d nse soc tal nch\ o
of complex related technologies. The reg JOn s e . , L
I
. i ' ntreprcneur ,1tp.
abour tnarkets encourage experimentati on anc c (Saxenian 1995: 12)
INTEGRATED APPROACHES
-
. the foundations of ili con \ ' aile) 's lot:nl and reL'I
n s mtcrprctntwn. . . . , ... on,tl ,.
1 In a"cnta , .
1
. i b\ kading mdl\ rduals. such tts l r,lnh. 1 l'rtn
111
l) t
, ron "ere nt< ., ..... ' 1
opmcnt traJt.:C "' .. ' L' . m the 1940s. Ht::. 'rsion f()r c1 'tct:hntc,
1
J co 'n Of
_ tT at tan,oru nn . tnmuni ,.
I.:ngrncenn.::- ... , . d. )f compctJti' c c.1nd colltlboratl\ e relatJonshtps bet\ , , t)
1 d round the l\m s ( ' \.:en tnd
re'
0
'c a d . t t ern i aocd b\ socio-cconomtc approaches and " .
1
..
1
.
. I finn an HlS I u . e- . . . . ' .... Olinde I
'rdua . . al boundaries. contmuous C'\.pcruncntatlon, tnfonnation c .
1
<
l on porous mstrtutiOnc . . , . . , . . . \c 1ange
t P . . h oh .;trotH! and local unt\ mdustt) hnks
1995
)
and uwo,atwn t . .... . . . . Such
< , , jd 'nee of the approaches to 1ndtgenous loca 1 and rcgionll d
de' clopmcnts art: t:\ t:. . , ... . , C\
t
dctmlcd tn C haptct 5.
opmcn u ' . .
h h h
'rotc indi' idual entrcprcncunaltsn1. federal government establish d
Rat er t an c . . . c the
. . . d t at .,c.
1
dcrnic comple\. that sttmulatcd St IIcon Valley' s early de
1 md1tary- m us n" < 'e op-
d
,.nodic dcfcncc-rdatcd c\.pans1ons ( Lesltc 1993 ). Stanford Cni, crsJt .
mcnt an pe . . y, tn
.
1
ha been a I-.e\ locus tbr cducatton. research, 5kdls and finance G
1
,, .
part1cu ar. c. en Its
relati,e growth and local and rcgwnal pohcy ha.s been negllgJble. Over time.
path depcndenC) has 'irruou5 net\vorks of and producti\ e relations,
institutionalised both infonnally and fonnally. that underpin the dynatnistn of Sihco
\ 'aJic). The sociaJ and productive net\\ orks are geographically ern bedded . they are th:
relational as et , forged m and through Silicon \' alley as a place (Storper 1 997) _ and
are capable of adaptation and rene\\ al over time. It is these social and productive
networks rather than specific indi\ iduals, finns or technologies that provide the
ment mechanism underpinning the evolution and resilience of Silicon Valley. Ftgure
7.7 de cribes hO\\ Silicon Valle) has evolved and led each techno-economic paradigm
in the post-war industry.
Competition and cooperation characterise Silicon Valley's social and producti\ e
networks. Competiti' e rival I) compels firms to define and defend markets, intenstfying
in no\ ati,e acti' ity (Sa'\enian 1995). Entrepreneurial "heroes' pioneer new firms and
t/)
"C
r::
"'
r-----------------------------------------------------------,
900
-
800
--
Semtconductor
competition
intensifies
-
Internet
commerctalizat1on
Cold War:
defense cuts
t/) 700
:J
0
.::
....
600
500
4()()
Commercralization of
the integrated ctrcwt
End of
Vtetnam War
1rst wave:
Second wave:
integrated c1rcwt
Fourth wave:
TJ '--h-ili_d_w_a_v_e_:--------f Internet
personal computer
__
7o 71 n 73
74 75 76 77 78 79 80
81 82
83 8
4
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01
Figure 7. 7 Employment and t
Source: Henton (
2001
: ?) echno/og/ca/ eras in Silicon Valley, :l.97D-2001
AND R
=--- EGIONAL DE
. . . . , V E L 0 p M E NT I N p R
I
lltgh nsks arc n1,\tchcd by pot , t' \ ACTICE
l . . . . . en ta ly high
1
1
t ..chnical and mst1tuttonal tntrastructur f . reward) Sil
(lCin . t; . c o spectal'. tcon Yallcv' ..
" 'cJ s .1 uniquely context. A shared lst goods and s . ' nch
.l,, 1 l,;. ' cornrn ervtce r
P' , . ns an open and reciprocal culture
1
n[l .nmcnt to techno\ . upp tcrs
ttndL:t pI . . orma 1 c.ltalo ' ogtcal advanc
1
. T-edgc knowledge about fast changing ted
1
gue and collab . e
lcH< tng . . 1no ogles tn . . oratton pools
.
1
u-v parttctpants. Many new ventures fail but th.. cornpcttttvc mark t
Inc us ; . f IS ts toler d e
tat ion a ntc o passage and an opportunity ate as nccessarv , . .
tnl:n . . h . . or the type , cxpcn-
rncd siondicant tn t e Innovation, knowledge and l . s ot collective lea .
dec
0
1
. c . f earnmg ap rntng
't
hough the pro neratton o start-ups and multipl b . proaches tn Chapte
3
A . h b . e US111esses c . r .
. ilar technologies as een considered wasteful (rl .d - ompctmg to devcto
st m ' . d . . on a and K P
O
re technological an organ1sattonal arc
1
enney 1990), manv
m h . exp ored tha J
a large firn1 hterarc y or rcgton with less fl uid . could be pursued
\\ 1 soc tal and md .
(Saxcnian 1994 ). ustnal structure
As a key clement of Chapter 5's indigenous approach ,
1 . . es. t 1e labour ma k .
t
the enduring econom1c dynamtsm of Silicon Vall e)' So.
1
r et ts central
o eta and 1
ndure beyond the finn and transcend sectoral and occupaf l b .'a networks
c . . tona oundanes An
market exists for part1cular occupat10ns and groups, facilitaf . b . open
. . . . tng JO search by mdh id-
uals and sktlls matchtng by ex1stmg and new finns. Supported b, .
. . . ) geographical prox-
imity hi gh rates of labour mob1 hty between finns arc considered
1
:\A
' . . . . nonna . lvlultt-finn
career paths underptn adaptab1hty and retnforcc the culture of continuo h
. . . . . . . us c ange, cxpcr-
imcntatwn and tnn?vatlon tn Sthcon (Saxcnt an 1995). Commitments to profes-
sion and tcchnologtcal advance rather than firms make engineers recepti ve agents of the
Schumpeterian 'creative destruction' in long wave theor es.
In addition to indigenous skill formation, Silicon Valley is a magnet for attracting
and embedding exogenous assets and resource5 such as industry functions and talent
from within the United States and internationally. attracted by leading-edge technology,
dynamism and potential financial rc,vards. High-skllled immigration. particularly from
the Pacific Rim, has further stimulated renewal. Entrepreneurial immigrants have estab-
lished new businesses, forging relations between Silicon Valle) and emergent high-tech
complexes in Ban galore, India, and Hsinchu, Taiwan. In 1996, l ,786 fim1s \\ ith S 12.6
billion in sales and 46,000 employees were run by Indian or Chinese executives
(Saxcnian l999). While their scarce technica] skills arc valued and
are being built, itnmigrant entrepreneurs ha' e also faced discrimination tn capttal and
labour markets and have created sociaJ enclaves and networks for mutual support.
Unequal growth and the 'Two Valleys'
. . . . -classical explanation. of local
Htgh gro\vth rates In Sthcon Valley ha\ e confounded nco
1
t. el) hinh-cost
. . . . . . I h been a re a t' :;:, .
and regional development. Sthcon Vall ey has " ff:
1
. h factor costs m a
1 . d d CtJVIt\ 0 !>Ct Hg .
ocatton. H tgh levels of tnnovatton, skills an pro u J
995
)
1
hstorically. amtd t
h . d 1 (Walker I .
tg road' local and regional development
1110
c . d
1
discconomtcs and
. . . t \lar peno t lC
penods of accelerated industriali sation tn the pos- . . h ha'c been Jccom-
. 1 . omws appro,lc . . ,
negative externalities expected by the extcrna killed immigrauon l;
rnodated in Silicon Valley. Geographical expansiOn and s sl 'On Valkys' outstdc
h t ,
1
Jc
elped, especially international relationshtps wtth t
1
c
:218 . . .
INTEGRATED
-
... th) 2004). , ustainabilit) hn" become a cnt i .,
1
.
. d t (Partlwsdt,l . l:t1 1\'ll
the Umtc a . mg the grO\\ tng urbnn a reds Ill tht: L
11 11
,
1
t:,
1
-1 Ba\ n:marns dlllt 1.:(
howe\ cr lC ' d
1
<lttstng and labour market. anJ gencratrng con Pest \
. ft t. n rn Jan . l ... .. tnn It ll
swJ..ing m n
10
. . hrl) for the peripheral '' orkforc.: lhm1 S,u
1
.Ins , ( (
1
d
muttn<l partJLU' nlro\
C\.tcnde com .
1
r I) hruh 1 able 7.5 s hO\\ median incomes
11
)
B \Vhtlc rc n t\ . . dVc no
and Fnst a) . .
1
. . pncc-.. l n' tromncntal damage C\ rdcnt too ca t
. , ith . ' b\
kept pact: " ....
1
, ptrtu;ularh amonl!: the mynad of manufacturing b )
d tction of toxrc ''as c. ' . .... . su con.
the pro L d p k ,
00
,)
1
he recent character of locaJ and regJOnal dc, cJ
tor (Pcllo'' an nr - - . opment
trac de' clopmcnt and Jtvcablc communities' in ST
l . s led to calL for more l , , I ICon
;:lie (Collaborati' t: r conornics 1998). .
} b d' tributcd uncquall) bet'' ccn soc1al groups and places in Sil'
Growth has ccn 1!:1 . Icon
.
1
( r" 0 \a lie\ C'\JSt dn tdcd between the reJattvcly prosper
\ 'aile}. For tegt: { . , , . . ous,
. . . b b of whttc and sktlled workers and the relatt vcly dJ d
mncr core u ur . . . . , . sa -
d S th and La t \stan. Blacl-. and H 1spantc penpheral hmterlands of s"rn
vantaoe . ou l-
or labour. dualt-..m ma) not capture the complexity of occu-
.
1
. gregatwn and cparat ton along class, gender and racial lines
pattona e._ "' .
howe' cr.
\\'hile a ourcc of rcgion,tl adjustment and vitality, labour market flexibility and
segmentation arc ke) ourccs of social and spatial inequality in Sil icon Valley. Benner
(2002) identifies three trends: non-standard employment growth (e.g. temporary and
independent contractmg). high job turnover rates and inter-finn mobility and incr 'ased
skill obsolescence. The upper echelons of the core labour n1arket are characterised by
high skills and rc\\ards. often accompanied by high risks. Peripheral labour market
cgment exhibit functional and numerical flexibility. Class, gender and racial
arc marked (Siegel J 998). Despite go\ernment and non-profit training programmes for
example. non-white constituted just over a quarter of managers and profes-
stonals but two-thirds of operators. labourers and service workers in the top thi rty-three
firms in 1996 (Benner 2002). \\cal-. employment protection and poor health and safet)
records characterise peripheral subcontract firms. Collaboration's darker side is e\ ident
too. Fim1s ha' e sa net toned \\ hi stle blowers, prevented government regulation and
Table 7.5 Median household income, median home prices and purchasing power, selected
US regions, 2002
Reg10n Median household Median home
Bay Area, CA
Boston, MA
Los Angeles. CA
Seattle, WA
New York
Austin, TX
Houston, TX
Boise. 10
income ($000) price ($000)
72
62
45
49
44
52
48
46
441
411
284
256
309
157
132
130
Purchasing power
(income as % of home price)
16.3
15.1
15.8
19.1
14.4
33.1
36.1
35.1 US average
43
= 166 25.9
Source: Adapted from Population Demo r . --:- _______
g aphtcs Ctted tn Bay Area Economic Forum (2004: 13)
LOCAL AND R
E G I 0 N AL 0 E V
. 11 . . ' PRACTICE
I 1
commcrcta y sens1t1ve safety infor . _
tthhl! < . . . . matton (Pelto '
'' . tion cn1oys lnntted success 10 this trad t' '' and Park 200
2
) L
b . I tonally n . abour
ll =' --:-.ccpt atnong su contracted (S
1
on-unton and f1
1du..,tl) , (.;, . . . . tcgc \998) \ . f1 r:agmcnted
'' -, , , functiOnS to speclaltst sen tcc pro, tdcr l .. r s lrms outsource 'h
sOLll Cl,; \, t 1c tnsc uman
' t in Silicon Val ley means employee\ tncrca. ,, . cure and volatile lab
mnr"l,; . . . stng y depend . our
O
fcssional assoc1at1ons, umons) for benefit , d . . upon tntcrmedi ...
( t.:Y. pr s an rctraHung 'B ancs 0
--- \ cnner 2002}.
. g and sustaining the Silicon Valley mod I?
101
p0rt1n . e .
.. Silicon Valley expenence has proved attractive to
1
.
The . po ICY-makers k'
'ts local and regtonal development Rccurrc t sec tng to repli-
cate t n at1cmpts t d'
f
Valley model ' have shaped policy. Approach . b
0
tsttl the essence
o a . es upon a mix r d'
and exogenous approaches m a supposed formula of P
1
.
0
tn tge-
nous csearc l umversitie .
k skilled labour and venture capital in an amenabl . s. :)Ctence
par s, . . . e envuonment have often
ndcrcd (Saxen1an 1989). The mgrcdtents ha, c often lacked th . .
1ou . . . e supportmg context
f l
listorical Federal tnfrastructure tn\ cstmcnt, soc1al and product
1
,, . k .
o , . . e networ relattons
ltr
al to Silicon Valley s conttnued dynamtsm and ability to adiust
1

0
d
cer . . . , novate an learn
in demanding, fast changtng and competttt\C markets.
While it has repeatedly confounded critics that foresaw its demise like other
regionally speciali sed industria! such as Detroit and cars and Pittsburgh and
steel in the United States, questions ex 1st concerning Silicon Valley's continued viab\lity
and sustainabl e developtnent. Some fear Silicon Valley may have outgrown the open,
competiti vc and cooperative culture central to its adaptability (Sax en ian 1995). The
hubris of individual greed and increased litigation against former employees and/or
suspected in1itators are threatening to \\eakcn the collective social and productive
networks upon whi ch Silicon Valley depends (Saxenian 1995). The state-led social
imestment of the post-\var period that pO\\ ered the early development and infrastruc-
ture of Silicon Valley (e.g. universities) not been adequately renewed amid the
tax cuts. reduced spending and state-le\ cl budget deficits of the 1980s and 1_990s (Bay
Area Economic Forum 2004; \Valker 1995). Record layoffs and stagnatmg
accompanied the boon1 and bust of the 'dot.com' bubble of the late 1990s.
11
. 200"') 1 t al contradictions of unsustatn-
growth marks the recent recovery (Mu ms ) . n em
. . d inequality may challenge the
able growth accotnpanied by labour market msecunty an
1
.
r ws about unemplo) ment,
0
'"
economic and soc ial cohesion of the Valley as concern g
0
' h
1
h . hether
.. h . g costs and ea t care.
wages, commuting times, job competttton. oustn . . 'bly to the emcr-
. . . . . . 1 I d . hip or see tt pass trreversl
Sthcon Valley can regam tts 1ndustna ea ets
5
.
1
. \'aile)' ma' vet
. , d 'A' lker 199)). 11con
gent centres in the Pacific Rttn ts unresoh e ( a t' II)' eroding local
. . l. . . o network poten ta
evolve into a lesser node in an mtemat10na tsmo
and regional deYclopmcnt benefits of its grO\\ th trajectory.
Busan: industrialisation, regional inequality and balanced
national development .
. . of the pcntn-
B
located tn the fat .
0
rise to
usan, South Korea's second largest ctty,
15
d .. g the countt) s rapl
I
. d t I centre uttn_
sua and emerged as an important tn us
1
ta
0
APPROACHES
INTEGR"TED =-
. . . t.
1
the J96(b (Figure gnn\ th ft .
11
1 ) nllfH .. 'TlLL n)n It h
tnJusrna pn .
1

1
. ,.
11
tc\ tt k'" .lHd . Y
I nt of the oo '' t: .t s I en .
den: opmL . , . urrld t() lltn\ lllg de\ .lstlltton m a Cl\ 11 ' ' .u dur inn I
b
l ' economiC n.., u; nt OLl , i ' II . ... t lL' l l)')()
1 t: . ..
11
. or ,, l:d .tnt mt o t pcopk ,, , . , 1 :'i
"hich \ trtually '
111

1
.1 . "' 'llrd \
10
1
.
1
tti on and ttl m the and
. 'd process o rm us ' . ( . l11rarn tl
r.lpt . . r income 1'()!--t.' from 15 per of the Ol CD a' in 1970 lat
Korea s per CtlJ)I ' ..... to 70
ref / ow
S t a
0
0
N
P'yongyang
J>F\tOCR \ri C
PFOPLEIS
RFPt BLI C
OF KOREA
,
, ... , ... ,
.,..,.., ... ' ...
, -....
I
'
I
I
I
'
I I
\ ( ' I I Gangwon - Do
', Seoul
- ,
' , , ,
Gyconggi-do
; -,
,_
' I ,
\
I
' I
I
I , '
I 1,-''- ,; __ , ,
, ' , '
,
F a \ t
\ ( (I
' , , 40, .> \ f.- .... ..
- ' '' , , Chungchcongbuk-Jo , .. -
1
- 1
I '
' '
, -'
, '
I
'._ R E P U ,B L I C
,(!hungchcongn.Jm-do 1 '1
\-' I
DaeJ con l' ,'
' ' I
kollnbuk-do
-- 1 \ \
. ' I
I
'
I
I
I
' I
,
I
I
' I \_, I
,_1' I ,
,. , ...
... . , ..... , ',
, -
I \
G\\ 8 0JU
, 'I
Jcollanam-do
...
I
\
\
'
'
'
I; ,_
J
I I
, , -
I
I
,
'-
\
G)
--
I
D<1cgu
t '
\ ' I ; -
I
I
,,_ , ....
' ... - . ,_
' <... ,
... .... - ..
' ; \
' ,
(I yc.:on nam-do
\
'
s
. \
,,
.\:
,,
L I
kilometres
I I I
50
I
Q
Figure 7.8 Susan South K
' orea
LOCAL AND REG
IONAL D
- EVELOPME
. . nl in 2005 (Ol:.CD 2005a) and
t.l:
I I (Cutnings 2005) .
IN PRACTICE
Korea was th
c e\cvcnt h 1
argcst c
,, lll ( conomy in the
developmental state and national econom.
The . . . c growth
I
the authontanan government f C'
UnC C . . . . \., O ICI1Cra\ p k
d
19
70s Korean mdustnall sat10n foll owed the ar Chung-hcc in tl
1
r.
an ttnport sub'f . 1c "60s
d
vclopmcnt that was repeated across cast Asia ' 'L . . sIt uti on model, a patt, f
t; u lltng thts . c111 o
1
.
0
World Bank 1995). The early Park Chung-he , '"' penod (sec Chapter
2
...
a s . c govc111mcnts . sec
,
1
ndustnes, notabl y footwear and tcxttlcs
1
,
1
th promoted labour 111tro
Sl ' t; . . c 1970s the - ... n-
shifted to pron1otmg export and launched tl , . . , Kotcan govemmcnt
. . . . 11 1C hett\ y and t .
drive, focusmg 1111tta Y on petrochemicals and aut om b'l . . c kmtcal industry
b 'ld' d 1 tes. ds well
cnoincenng. shtp u1 tng an , atcr, consumer electro . r as steelmaking
o . he role of th '
during this penod focused on protecting the k . c govcmment
. tc mar et ttghtly I .
banking system 111 order to provide cheap finance for ind , ' .contro hng the
. . Th . . us I) and ensunng a rc , ..
labour rclat10ns regtme. ese facilitated the dcv
1
prcsst\e
. d . d . 1 . c opment of the c/w )b I
the famt ly-owne tn ustna groups, wht ch were later to b,
1
(:
0
'
. ccome g obal brands such ts
Daewoo, Hyundat , LG and Samsung (Amsden 1992 E''an.
1
9
89
. C . '
. .. . .-H s ummgs 2005). The
close relat10nshtp between government, mdustry and finance led K "' b .
. , . . to c gt ven the
sobnquct developtnental state that 1s a system m which the state's .
1

. . . . pnmary ro c 1s to
factlttate mdustnal growth (see Johnson 1999: 'Nadc 2003) but 1n th" K
\.: orcan was
also associated with politjcal corruption (Cumings 2005 ).
The hi ghly centralised nature of the authoritarian and military governments of this
period meant that industrial policies were not concerned with achieving territorially
balanced national development. Despite its ethnic homogeneity. however, region-
ali sm has deep hi storical roots in Korean polittcal culture, north and south, and the pro-
democracy m O\ etnents of the 1970s and 1980s partly had their foundations in strong
regional identitic .. As industrial locati on policicl.) developed from the end of the 1960s.
regional partisanship played a part in its designations. often favouring Seoul and cities
such as Busan and U I san in Gycongsang pro'v mce. at the expense of G\\angju and the
south-western Jeolla region (Cun1ings sec also Kim and Kim 1992: Krm 2003).
The growth of the Korean econon1y continued more or less unabated, surviving the
oil price ri ses of the 1970s. until the economic crisis that swept through the Asian econ-
. . ' . . . c ul\. LS('O ?00 l) It is \\ idcly agreed
omtcs m 1997 (see Korea Natt onal Commtsston 10r l 'L - "
that. especially in the case of South Korea. the " as not an outcome of poor macro-
. f h fi ancial S) stem under pre..,-
economic fundmnental s but of the rapid deregulatiOn o t e n .
2
' 1 twn ( Stt ghtz 200 ).
sure from the United States, leading to unstable asset spccu a . .... 1 l
1
,
. . I . kl ' from tht '\ setbac"'. )) t
Although the Korean economy recovered surpnsmg ) qutc ) , . . ds
b
. . . l nt path at a . .
cgmnmg of the twenty-first century, Korea s de\ l: opme h I\ n to open
0 h
"' . 5!titutions such as t c . .
n t e one hand Korea came under pressure ,rom h thcr trtnd ne\'
.t . , r nd rot. On t c o ( .
1 s economy more directl y to global market ,orccs a . . d Roh \ ltlo-hyun,
d 1 t Kim Oac-Jung an
cmocrat1c govemn1ents, notabl y under prestc en s . kl'
1
g 1ncqualit y und
. ' atmcd at tac 11
commttted themselves to a ' parti cipatory economy .
1
t Roh \1oo-hyun.
. . . . . nt of Prcstc en . .
InJUStice (sec Kim 1996). In parttcular. the go,etnmc d . !l tht' l)uwcr L)t tht:
h
. . . , sl\ to rt: ucrn=
w lch took office in 2003, con1mitted ttsclf sm1Uitam:ou.

ED APPROACHES .
iNTEGRA r - tion of three tree ccononm /ones' in
I >uch the crca . L'on,
I attracting f DI t tn ... . ,thcnuH.! -..ubnatwnal gl)\ L'rnmtnt .md <l
clwebo. ' Jinhac ,rn.:n!! .... .
1
, tng
.. nu and Bu an- b tlancctl nattonal de' c opml!nt ,tnd closing tl
G,\ang)a =- ' at 'J<:htc\ tng l h:
1 polin' auncu ' s . )lJI rCL?.IOO and the rL''t of t ll' countrv. The n.
rccJOna .. tl c Grcatt:r Cl .... . cw
-d ,, oap bdwccn
1
1
(>n de\ clopmcnt m the (trl!ah;r s ,
0 1
"1 em no!:> :::: . ' )Ide JOg tnltb . .... \.: u
. al poltc) wcludcu J _
1
. S and rclocattng O\ I 70 go\ ernrncnt age
rt:cJOn, tal Cit\ out o t . "'
... _on
010
, ing the capt
1
r rL'ducing the proportiOn ot public ornan,sa
rcgt , . Korea tn t lL' p .. to -
. to the ot ' . t' 85 per cent in 2004 to 35 per cent by 201,
etc a ital rcgt<.Hl rom . . . -
ttons located tn the c, P ... . ltc-..tetl. The 1cgtslatton, passed m 2004, to create a
r. dtd not go um:ot . ' 1 ... .
The ne'' po . . Ch nnchcong Pro\ mce was dec a red unconstitutional
- ( capttal
10
u .... d h S J
nc'' admmrstra I\ t:
1
f
0
, emmcnt then propose t e pec1a Act for the
al Court. g
b\ the ConstitutiOn .. C'tv' \\hich \\as enacted m 2005. In contrast to the
. . f th .. t: 1 . .
Construction o c.: tf .. apital and home to the legislative and judicial
S
1 will rcmam a" lC (.; . .
2004 plan. eou .d, t According to the re\ tsed plan. forty-nme government
11 cl'- prc"1 en .
branche . as ''e t ... will be relocated by 2014. The population of 1he
. . I d. 1! t\\ ch c mnu-.. nt.:'>.
agencte me u m... _
000
bv ?OJO. 1 he potential regional development impacts of
t s tar"etcd at .)OO. ., - 005) I dd.
nc\\ CJ)
1
:::: ubstantial (Lee et al. 2 . n a Itlon to the new
. theor.. at are
thts move,
10
., ent ahead with its plans to move 176 public
d
.. tr ttve CIt)' the govemm
\
011015
a . f ....h... I tal region by 2012. Taken together these measurc5,
twns out51dc o t t.: cap
orgamsa f the most radical atten1pts in the world to alter a national
ne\ crtheless. represent one o
spat1al cconom)
Globalisation and the growth of regional inequalities:
the challenge for Busan
The commitment to balanced national de\ elopment presents a set of and
opportunities to Susan. which hes 500 km south-east of Seoul has _a as
a port and a5 a tradmg centre wtth Japan that predates the era
7.8). TradJtwnall). tt \\ aS also the capital of Gyeongsang prov1nce. However, teftectmg
the city'5 growing s11c and industrial importance. Busan was given the status of a sep-
arate metropolitan authorit) a5 far back as 1962. although its boundaries were extended
subsequentl y. In 2005. the metropolitan region had a populati on of 3.75 million. .
Although remaining an important industri al centre, Susan's relative position
oratcd during the 1990s, "ith its share of national G D P dee I in ing from 8 per cent 10
1990 to 6 per cent in 2002. Busan 's loss was Seoul' s gain as the capital and
neighbouring Gyeonggi Pro\ ince grew rapidly. This Greater Seoul region now contams
over 40 per cent of the national population. The widening gap is mostl y attributable
low labour producti\ ity. \\ hi ch in tum reflects the sectoral composition of 5
economy. Buc;an s relati ve prosperity in the 1970s was based on footwear and textile
production and other traditional forms of manufacturing, which accounted for 25 per
cent of Korea's exports. The decline of these industries reflects the growth of low-wage
f d Seoul
rom else" here 1 n A s1a (Shin 2004), but the gap bet ween Bus an an .
Widened a ft cr the 1997 crisis. Seoul' s industrial mix of R&D-based fiml s, I CT Indus:
tries, business scniccs and media industries and its prospective role as a ' world crtyn
prospered tn the more liberal post-1997 en\ ironment (OECD 2005d). While Busa
I
--
-----------L-OCAL AND REGIONAL
DEVELOPM
ENT IN PRACTICE
nl!nt.:t.: c fi '' ea enmg ex
f c'ports, 1ell rom l 0.4 per cent of th K POrt perfonnance _
. ..,hJrl! o . e orean total . 1
- _ 00.:; and a sh1ft to the use of temporary forms f
1
b m 990 to 3 per
t ll1 2 . . o 'a our. Over l1 B .
cd
1
lati\ to that of the capital rcgton (Seoul In
1
a ' usan s per-
ancl! rt.: c leon and G , .
fonlh --d during the 1990s (Table 7 6 ). yconggt Province)
d
tt:noratt: h. h
c . the ri se of Korea w 1c presented nc\\ problems t .
It was . o reg tons ')Uch N I E
d fi 0111 the 1970s that we dt5cusscd earlier in this h s ' ort 1 -ast
E alan r . . c apkr, but Bus
Tl:;, . ' lar problems to old 1ndustnal regtons in Furopc d \ an lS now
f: cing s
11111
an orth America Th
a ontains rel att vcly few of the h1gh-tech industries that h . . c
conomY c ' c a1actense the know
c b ed economy and hardly any locally headquartered finns B , . -
iedoe- as . . usan s port remams
o t and one of the largest m the world - but faces grow ..
importan - . . . "" mg competttton from
h e in orth East Asta, espec1ally Chma where massive expa . .
e1 cw er . nston. m port
. ha\e taken place. There ts more general evidence that fim
1
s are
1
.
8
capact ty . . eavmg usan
. hbouring or ren1ote regtons and that new firm are gro,\ing at an insuffi .
for ne1g . . . . .... ctent
ffset this, wh1le footwear and textile production has relocated to the Philippines
rate too
.. and China among others.
\ 1etnam .
cnt developments, however, need to be put mto context: much of the employ-
Rec ft d . . .
h nge in n
1
anufacturing re ects pro uct1v1ty gams and many finns have relocated
ment c a . . .
the wider region. Moreover, Busan remams a world centre for slupbmldmg, along
h nei hbouring Ulsan. The most likely rnedtum-tcrm prognosis for Busan is that it
\\ l t g . l . b . l f: . . d' ll
. an important industna reg10n, ut wtt 1 manu actunng prov1 mg a sma er wtll rematn .
f overall employment. The reg10n needs to generate employment from other proportton o
Table 7.6 Weight of GOP by regions, South Korea, 1985-2000
Natronwide
Seoul
Susan
Daegu
lncheon
Gwangju
Daejeon
Ulsan
Gyeonggi-do
Gangwondo
Chungcheongbuk-do
Chungcheongnam-do
Jeollabuk-do
Jeollanam-do
Gyeongsangbuk-do
Gyeongsangn am-do
1985 1990 1995
100 100 100
25.8
8. 2
3.9
4.3
-
12.9
3. 7
3.4
6.1
4.1
7.6
7.4
11.6
26.3
7.8
4.1
4.9
2.2
2.4
-
15.5
3.0
2.9
3.5
3.5
5.2
6.8
10. 9
23.6
6.7
3.9
5.0
2.4
2.2
-
17.0
2.7
3.3
4.1
3.6
5.3
6.7
2000
100
20.3
5.8
3.2
4.2
2.1
2.1
4.8
18.7
2.5
3.5
4.3
3.2
4.9
6.3
6.6
0.9
J . 0 9 1.0
eJUdo . . in Lee (2004) n out of
- m) Database, cr ted itan crty. ancl take
Source: KOSIS (Korean Statistrcal lnformatron Systc ted to a metropol
12.2
1.0
Ulsan was eleva
Note: Under the 1997 administrative area revamptng,
Gyeongsangnam-do province.
\

.\ PPR OACHES
INTEGR.4.1 ED . . " . , . .
, , ,th u1 I( 1-bast..:d ,1lthough not
011
th,
tnc ....cd -..omc gn.n\ . I fl c
It ha:. \\
1
) lnt 'nntJOnal f. lim ,\ ( J ) h thL' lar"(.'st t
... o . an t.: ' o Its
f. CllUL wluk Pu:-.c ,
1
.(J nee of place mttrl-..ctmg dlld the p b
0
. be ccn t.:' t: 0 ::-ost lc
kmd 10 \sJa and can . , '\ ,, Bw.an tacc::-. ch.tlkn
. media Uldu::.tnt.:.... . . In
catah tor nc" . fittOn in the he reg tOn, "here C\pon ll1"'
1
"' f . , if\ IIH! com pt.: -. u'"cts
the conte'\t o rntt.:n - .... t f\\ tee the global a\ erage (Ol ( D 2004b ).
!HC\\ at tlvOU ....
1n the - . t nrunt 1in 1t tmportant port role \\ htlc de\ elopinn
, fi ino 1"' o ' ' . . .::. HC\\
The ta'h at: :::: . . p' .
1
Critical to the reg tOn s strategy is the de
1 ..ntal) cconorn tt s ' . \ c .
and complcmt: . h , Fr ", t conomic Zone (FEZ). established by the Ko
f the Bu an-.ltn at.: rean
oprm.:nt o d . .
1
form ot C\port processmg 7one of the t) pc dhcJss d
" and opcne t n .. - . ' . . . . . . e
go' emmc Fez ro' tdc-.. tel\. tor foretgn ll1\ est or s, dest gned to H1l ease
Chapter 6 The c p 1 d 8
tn . h .
1 10
,, in Ill genera , an usan. m partteular
" of FDL ,, htc rcmau ... . .
flo . r.
01
..ntJoncd abo\ e. In the Susan context, the ltmtts of ')Uch
the l: . . .
. . nfi d c another f El ts located m Incheon, adj acen to the
inttlall\ e are mat:nt c .
. .
1
rport and coul. could lead to mcreased fisc, 1 rs'
P
rincipal tntemauona at . d . C
. .
1
t t on wtthin Korea of the type dtscusse m hapter 1 and wnich
and temwna compe I t .
lncheon seems better placed to \\' tn.
Developing indigenous assets through a regional
innovation system
The national and metropolitan authorities in Busan have sought to develop key sectors.
although b) the these \\ere defined rather broadly. At the same time,
national and local ''ere ')howmg interest in the concept of a regional innovation
\Stem (RIS). The Roh go,emment\ to decentralise major government agen-
J
ctes oubide the capttal region presented opportunities to develop the RIS. In a bid to
forge lmkages \\ ith its assets. Busan applied for the relocation of public mstt-
tutions related to its port economy - the Korea Ocean Research and Development
Institute (KORDI) and the Korea Institute for Maritime Fisheries Technology (KIMFT)
- and related to its emerging industnes - the Korea Film Archive (OECD 2004b).
Busan has twehe umversities and several research institutes but its workforce has
lower than a\'erage educational attainment and the region suffers from a ' brain drain'
as graduates are attracted to the opportunities provided by Seoul. There arc marked
regional differenres in R&D perfom1ance in Korea (Park 2000). Moreover. Busan lacks
a \\ell-de\ eloped technology transfer network that I inks the production and diffusion of
kno\\ ledge. \one of the top 100 Korean firms is located in Busan. Jnstead. HQ func-
tions are_hea\ ily concentrated in Seoul and Gyeonggi province. In fact, there is e\ 1dcnce
of gro'' mg geographical concentrat ion of key funct ions: in 2004 Renault-Samsung
Motors mo\ ed its tech 1 h . . 11 d 1 b r The
mea centre to t e cap1tal reg10n 111 pursutt of skt e a ou
Iaroe proportion f fi B - n
o
0
rm tn usan ts St\1Es but these have a poor record of mnovauo
and attracted only 0.6 per cent of Korean' enture capital in 2003 (OLCD 2004b).
Gtven the importanc d d. . d. d in
. e an t Jtculty of mobilising indigenous potenttal tscusse
Chapter 5, Improving th. d . . t for
. . . c ynamtsm of the regional innovati on system JS a pnon Y
nattonal, regiOnal and I . I . . . . . d all
. oca mstttuttons 1n Busan. Central oovernment rcqutre
tn Korea t d . . o . l
0
pro ucc rcgtonal innovations plans'. Busan developed tts P an,
LO CAL AND RE
___ . ..-------- - GlONAL DEVELOp
. MENT IN PRACTICE
I 1
to the launch of a Reg tonal lnno\ ation C . -
I il.'h ct . ommntce in ">00
''
1
. .... fiftv-St'- rl!prcscntattves from the metrop
1
... 4. The Comn
. pn -.,t;S J . o ltan govc . lJttce
"otn , 'arch and Ctv tl butts . .'"'. . rnmcnt. bust ness. univcr-
., ft.; !:It: . . . . ll1stttuttonal ised
"' .
1
Its role ts to tnonttor rcgtonal mnovatton p
1
. , . and has a limited
i ct I o t:. o IC\. coordt .
l
1
r\,; , .
1
g proposals to central government with the . natmg and networking
nd mar'-'' . . atm of prom . . . .

1
1
.,&0 effort. In thts field, and m others, act ions at d ottng spectahsatton
the ' . . me at prom t'
trl quickly sptllover to a w1der region whtch tn .
1
d
0
mg developments
susan c u Gycong .
10
The question of how local and regi onal de\ el . nam provmce and
Ulsan. . . opmcnt 1s gove d h
d a
s an itn portant 1ssue tn Korea (OECO 200
4
b) rnc as thus
emerge
overnment and governance of local and regional
The g ment in the shadow of Seoul
develoP
r a is a unitary country with a history of centralised government d
1
. .
Kore . an tmtted local
Omy The legal foundattons of local go\ cmment were establt'sh d
19 auton . e m 48, but
limited local elections began only 111 the 1980s. In effect, local authorities were instru-
ments of central government. Local authorities began to gain power in the
1980
s and
elected local government became the nom1 in the 1990s. But local governance remains
undcrdevel oped:
First, the hi storical legacy of central control has left excessive authority at the
central leveL ln particular, the education budget is largely outside the control
of local authori ties. Moreover, weak self-governance and a lack of capability
at the local level have limited the effective usc of the power that they do have.
Second, the severe imbalance in the financial resources of central and local
governments requires local authorities to rely on large transfers the
government including eannarked grants. Third, there t& a large vanance m the
fi scal independence of local governments, wtth local O\\ n-source revenue
accounting for 95 per cent of spending in Seoul compared to only i 7 per cent
in lower-level citi es.
(OECD 2005a)
_225
. h ' hed O\Cr time to reflect the
The system of subnational government tn Korea as e\
0
. d metro-
. . l. . B san destgnate as a
degree of urbanisation and funct tonal spccta tsatwn. u . . . . granted the
. . 1995 tropohtan clttes "ere
pohtan ctty under the Korean systetn. In ' me .
1
. r sefull) match
. h t Busan's City tmt s u
powers of provincial governments. Thts means t a . h are problems m
. . . l d plannmg. but t ere
the funct1onal regton and allo\.v effecttve an -usc . ce (G)'eonenam)
. . hbounno- pro\ m ....
effecttveJy coordinating relationshipS wtth the netg . e_ aht be too large a
. . h t polttan regiOn mto
10
some policy areas (Shin 2000), whtle t e me ro
(OECD 2004b). 003
scale to engage citizens in local governance R h (Jovemmcnt m 2
D meed by the
0 0
h I o
eccntral isation policies, such as those annal d b , Bu an. But t C} a::,
f h
ha11en(res face ) d that
present an opportunity to address some o t e c t local lc\ el in or cr
1 capactt)' at t lC
ratsc new issues such as how to rai se poltttca ' democracy 111
th cent struggle or
e new powers can be effectively used. The re
EGR
A 1 ED :..PP ROACHE = S-""'=
1NT
1
'll-clruantscd ci\ tl "octet) and, Cl'hOitW thl .
, ntn lhl" tl '' t.: ::- . . .... l
rncan::. that tht: tOll . , i
11
Chapter ..t_ ,1 chalkngc ts to hnd "\\), of
111
,
1

. . al r,ust.:C I , . . "> n 'lng
tbout democratiC . . I . tl "lncrnancc (set.: Kdng _()() '). Bus.tn h.t s C\pcnn ,
. , H:t
1
, ch 111 o<.., ltnted
(1\ tl mon.: ' , , .
11
the Ill) con and dong d , rcHcrt
, )tlt>nn n>llllllttlt \_;" ' tng the
" 1th Jocal ,wtc . . tpl ,, t>f Prcs1dcnt Roh, although the) remain rei
. 'rnment pr tnt t.: . au, dy
panicipnrory g<n t.: . . . , s) (OL CD 200-fb ).
. "" Ul the ClH L'llltlllLt: . .
muwr ... , ....
1
t r+tti\C dccllnc ts. tn part. also the story of s,
1
,
of Bu. an s 1 ct u ' . . .. s
1 he tof) . . h ... 111 lnrgc measure, ts a prod
. htl\ e ,,10" t . . L uct of
accclcrattng rt.:'
1
1
. , ,, thi-; hesto\\ s on (potential) '\\'orld cities' Ta kl .
J' ( ll and tht: dU\ dtl ,tgt:. , . C tng
globn t.a
10
.
1
d 'd, j, ct:ntrdl to the strategy of balanced national de\ ,
1
I , \\ideo i rw: rccwrw r \ I . . .
Ill . .... -. , . .
1
." '" to rcqutrc cndunng act1on by both nat tonal and rcor .
1 mcnt'. but tts ucct:'\S t t t: b ona
oo\ cmmcnts.
;;::
Ireland: the 'Celtic Tiger', social partnership and
socio-spatial inequality
The recent C\periencc of rap1d grO\\ th and economic transfotmation in 1 rcland has
t t d \
, orld\\
1
dc attentiOn and led to the sobriquet 'Celtic Tiger' (Sweeney 1997'
at rae e ,,
\'fncSharry and \\ hite 2000). The high national grov.rth rates have rai sed fundamental
que tion for local and regional dc\elopmcnt. Traditionally, the problems of the frish
economy were analysed m of 'dependency theory', with lreland compared to
'Third \Vorld' economte and defined, perhaps contentiously, as ' Western Europe\ only
colony' (Kirb) 2004: -,ee also Crotty 1 986; Munck 1993). Ireland is a relatively small
country of 3.9 million people. with ome 1.1 million of these concentrated in the Greater
Dublin area. Gi' en the izc and openness of the Irish economy in the context of its
peripheral po ition at the Atlantic edge of the European Union (Figure 7.9), though,
O'Donnell ( 1993) conccptuali es the Irish econon1y in terms of sotnc of the regional
de\ elopment theories e\amined in Chapter 3. As such, the Iri sh experience - and the
factors that underpin tt - ha\ e attracted the attention of regions around the world. Despite
being a nation state, 111 important respects ireland is more like a regional economy
than a national one, particularly due to its high dependence on international trade and
the historic role of labour migration in shaping its development (0' Donnell 1993;
O'Donnell and \\'a Ish 1995: Krugman 1997: Smith 2004 ). Observing the Celtic Tiger
at it height. Krugman noted that ' r reland 's boom has tnan) elements of
a typtcal regional economic take-off. together \\ ith some intere. ting related
to th: unccrtaint ie of foreign in\estment' (Kntgman 1997: 48). O'Donnell and \\ alsh
( l99y 223 l conclud, tl 1 . , 1 E' ,
. c.
1
cn, t 1at Ireland ts 'both a reo ion and a state \\ tthtn t 1e v.
Dunno the 1990 I'l .I .
0
. d 1-
o tc anu \\a one of the fastest oro\v ing cconomtes 1t1 the C\ e
oped world (Table 7 7) . i
0
. f
tl , . anc b) some measures such as expot1 trade ( fable 7 .8). one
0
lC mo t globaltscd Ir"l d' . - . . 1h n
... . . s fecit dunng th1s penod was all the n1orc remarkable\\ c
llktlstucd arramst it. t . .... 'd-
ninet 1 o - s Hstonc performance OYer the previous 150 years. rom the tnt
cent
1
ccntur\ Ireland , [! 1840s
Ireland'
1
' ormcd poorly. Foll owi ng the agrari an crisis of the '
popu at1on hah l!d .
1
l . . . h levels
nt
1
contmued to be charactcnsed by hlg
AND REGIONAL
-=--=- 0 E V E L 0 P M E NT
I N PRACTI CE
f I (l II I
1\
i ('
f ::
I I
( . ""hnderr\ '
I ' '
' ' ' I
(} (' C C1 II
Dnnegal
{ ' - , ' \ntrun
(
......r- / ,
'' '
'-._ T) ro ' (\v--.
/-..r o R r H Etk -- .....
I - \ __ , 1 R ..A
\ ' I
'-"'--- C'-o.J , ' r . .. . 1
1
, ' I c rn.magh ' 1 1
'- ' ; Slllo
1
'. \._ \ ; 1 1 Arma1:11 ': Down
,.... ', .. \,, I \_, '
' , - , .- ,' , "'""c han /
, \ I \ I ' ""'"' - \
' ... --.) ' 1 .curun , '\
' ' , \.A._ ....... ... \ . ' ... --
........, ......... ,, Ca\on ' '
\ I \ \ I -
I ' , I ...,_ #
' 1 Ro,common
1
, ' . Lo tb
I I \ "" \ t
, ,.,.. \
-' _..,._ I \._,.1
, \ I I \ \.
,' - -- - ":. 1 l. ungiord - ,
, ' I ," ""' , ,
I \ \ .,. "' I
0
.. o
'
' ' ' ' Me th
: 1 - ' ;
' I ,
,
I- ,
REP.U BLI C ...-'., o
, ,)- 1 ,- ' <- , , , ' Dublu
' -', ' I \ , ' --, '
'-\, 0 }<' Ottal } .-' Dub! n
oa I .. \ \
'""... , ....... ", ,. J.\ 1ldare ,' ' .... '
', I ' o ,, ..., ,.. ,,,
,
1
,,'-. ,-IRELA NO '. /
, o I 1 '
' J I I
I
I ,
1 , 1 ( .am s , , \' .
1 , ; \... I ..... - ' ' ,, ICa. 0\\'
I " ' ,
'
I I .. I l..
I I' t
I \ 1-... \ "",..,. .. ,
\ I' - ' I
( - ';, .. . .. ,, '
, ' - , ,. . , \ , .. _
-.
Clare
- ......::':::=$ ' ' C I ' -' ' .. ..... ', , ' '... nr o-. ,_ , ,
' \ \ , \ <I
._ I >
' Tiprhr -
, - I
, ,
---- Figure 7.9 Ireland
' I
I
I
LJUlcrick
- - ; ; m.cnn) \ :
I ' \ I
... , \ '
' '
I
c - ..... , I . '-
, I
I
I
',t'- ', -,
r
,... ...... -.... I
,
I
,
- , \ \
I ,_ ... _,\
-
I '
' \ \ \ ' I
'
I - ' ,.. ' -
I ,
\
,
-
I
..
, -'
Cor!.:
'
' I
'
'
\\'atrrhl!d
I
. , '
' -
I
Celtic Sea
0
N
k1 ometres
100
'
. . . d c from Britain. it pur-.ucd
ot cn11gration. In the peri od after rreland achie\ ed tndcpen enc
1
wall
a )' .
1
.
11
bchtnd tile pro c
po tcy of agrarian autarky and li tni tcd mdustna .
0
. Irdand
h' . " dur111 CT the 196
cry tgh trade tariff bani ers (Lee 1989). JI O\\ C\ c.;r, o
1
r . h
a I . 1 the .-\ng o- (I:;, , _,
gradual process of opcmng up tts economy. .. de (GATT) 1n 19t)
Agree Ttrt fh and Ttct
ment, acceding to the General Agreement
011
' , ,. . !992).
and d
1
9o1 0 \ talk)
JOtntng the EEC in 1973 (Lee 1989; Kl: nnc Y /-
count!)'
8.1
-
Ireland 3.3
unrted States
3.3
soain 2.7
unrted Kmgdom
2.5
Netherlands
2.1
France
2.1
Denmark
2.0
Belgium
1.5
I tal}'
1.2
Germany
OECD ProducttVJty Database. September 2004. cited in IDA Ireland (200
4
)
Source: Adapted from
--
-
Table 7.8 Destination of exports. Ireland, 2004
-------------------
United Kmgdom
17
%
Rest of European Union 41%
United States and Canada 22%
Rest of world
19%
Unclassrfied
1%
Source: Adapted from E>.ternal Trade, Central Statistics Office. October 2004, cited in IDA Ireland (200
4
)
Liberalisation and economic crisis
.-\pcmg the e'(ogcnous growth discussed in Chapter 6, the opening of the Irish
economy \\as intended to force its modernisation by reorienting indigenous firms
towards export acttvit) and attracting foreign investment. Ljbcralisation occurred during
a period of sustained growth for the world economy and, especially, the intcrnationali-
sation of LS manufacturing capital. A new economic governance institution, the
Industrial Development Authority (IDA), was established to pr01note Ireland as a desti-
nation for foreign Jn\Cstment and the Irish offered strong fiscal and financial incen-
tJ\e5 principally to foreign as well as indigenous firms (Tomaney Bradley 2005).
Ireland experienced strong economic gr0\\1h and rising li ving during the
1960!) and d I fi . .
. . a rapl s 11 t bct\\ccn the stages of moderntsattOn from an agranan to an
economy. r lowe\ cr. Irish-owned indigenous industry contributed compara-
little to this gro\\ th and experienced decline following the remo\ al oftariffprotec
tton. Ireland came to 1 --1 h ,, 1 . . fi ,estment
. . c ) cavt Y on attracttng succcsst\C rounds of orc1gn tn\
111
order to mamtain 1 h lono-
". . . emp
0
) mcnt 1e\cls. \ltorco\ cr. questions \vcrc raised about t e o
kun contnbutton of T\C f renous
1
... , . s to I nsh de\ elopmcnt. Echoing the probll!ms o cxog .
( \;\ elopment tdcnt. n , I . ('h I outtne
. .
1
leu
10
aptcr 6, Ireland seemed mainly able to attract on Y r
productton at:ttvittes . d I R&D and
. k . . ,m O\H:r and semi-ski lied occupations rather than
mar t:tml! c.H:ttvitics wl J . ' d cgional
t 1 ""' He
1
proYtdc more skilled J. obs and greater local an r .
opmcnt potc1 t 1 (N . c litton 1
I.\ l cltmnal and Social Council (NESC) 1982. u
LOCAL AND REGIONAL
DEVELOPMENT I N PRACTi CE
()
tvtdlt:y lmnancy 1995). Indeed
1
.
1
ILJ92: 'f' ts'archabottth tcandbccamca
I
. Ol l.: c, l c problems < f' b. n ltnportant "'
11c t us . > 1 anch pi 10cus
dun d rehearsed tn 5 and 6 foct . ,1 ant development and h
lie\ c ' . . . tScu on how 1 1 t e
ptl . lndtgenous cnterpnse. C onccms about the P" " rc and could devcl
lllgl;r . ....r,onnancc f h op
. 11 rn' c dunng the 1980s. MJ0<,et ( 1992) attributed
11
.
0
t c Iri sh economy
bL'laJlll; o . 1 t f . . lis poor pert!
. the nat10na sys em o mnovatt on' \\ htch f- .
1
d . ormancc to wcak-
Ill "' , . at c to I mprov . .
. . tandards and generated cycles of em1gration cc t .b . c productlvtty and
Jp. 1ng s . m 11 uttng to . . .
. , Succe!:lsivc Insh governments expanded pub!'. ... . tl vtctous circle of
declt nc. lt: cxpendttur d
. the 1970s and the onset of recession m the
1980 1
d e an borrowing
lunng
5
c to wars b
l fl\ and pub! ic accounts and a rapid ri se in linen
1
etung a lance of
P
avrncn . . .
1
P oyment Bv tl
" d faced a deep econom1c cns1s.
1
e l980s.
trdan t
The rise of the 'Celtic Tiger' and national social partnership
I
. _ in thi s historical context that Ireland's more recent econ . "'
t t . , . . . omtc per.onnance has
cconomtc, soctal. poltttcal and cultural transfonnation ls
1
. . . .
t: . . o atmg mdwtdual
causal factors. tS but any. account of_ the Celtic needs
10
acknowledge
a number of tssucs. h cland s accesston to the European Umon meant that it was inte-
grated into a market and, with the reform of the European Union
Structural Funds, the h tstoncall y low levels of meant the whole countl)' was
entitled to the highest level s of European regional policy funding for most of the 1990s.
Since joining the EEC in 1973, Ireland recci ved over !17 billion in EU Structural and
Cohesion Funds support up to the end of 2003. Under the programming period
2000 2006, Ireland will recei ve a further !3.35 billion from the Structural Funds. The
Cohesion Fund contributed !586 million to Ireland during the period 2000-2003
(Matthews Walsh 1995). Significantly for local and regional development.
the Irish government used these resources judiciously, partly to improve the physical
infrastructure but also to support shifts in industrial policy.
Important, if gradual , shifts in Irish industrial polic) occurred from the 1980s onwards
often supported by EU regional policy funds (l omanc) 1995). Connecting with the
themes of institution-building, indigenous development and context-specific policy
developed in carl icr chapters, 0 ' Donnell summarises these changes:
d. terpnses and scpa-
Therc was increased etnphasis on dc\clopmg m 1gcnous en .
. . .
1
t ere created
rate agcnctcs for FOr and tndtgenous devc opmen '' .
policy became more selecti ve and demanding. The development agenctes
. . ompany deYelopment
worked closely with firms in devisi ng and tmpl ementtng c . h
. ated to mcrease t c
strategtcs. The National Linkage Programme was ere
1
0
. \11\C Science and techno Oe)
number and capability of Iri sh sub-supphcrs to s. . , ...... d 1 ht:
I' . f a(Jcnctes were .
po tey was reorganised and new scctor-spccl lC e .
1
d. ng finn
I"' ti\ e targetmg ea 1
approach to inward investtnent became more sc cc h naccuticals.
. nputcrs. P an
10
the htgh-growth, high-technology sectors: cot
medical equiptncnt and software.
1 0
sweeney 1997:
(0' Donnell 2004: sec ? s . . "000 "00-l)
0 Rtatn - -
tNTEGRAT0

Plate 7.2 Global connections: the International Financial Services Centre, Dublin, Ireland
Sou ce: Photograph by Davtd Cna1es
In an early precur or of the trnportance of the economics of knO\\ ledge and learni ng.
an additional feature of the In h cconom\ \\as the comm itrnent of the irish state to
J
imc::,tment in education. cspet.:tall) at further and higher level s. B) the 1990s, Ireland
had one of the highest proportions of graduates in its working population in the worl d.
Echoing the transtnon m the government and governance of local and regional de\'el

opment. 0 Ria in argues that these changes signalled 1 reland s into

a deYelopmental network tate, \\ hich attempts to nurture locali sed product tOn and
inn?vation networks \\ ithin global in\ cstment flo\\'S by shaping the character of it
local connections to global technology and business nct\vorks: 'Thi5 is made
tblc the multiple embeddcdnes of !)tate agencies in professional-Jed net\\ Orks
ot mno\ at to d
. nan .
10
tntcmatlonal capttal. a \\ell as by the state' s networked organtza-
ttonal :>tructurt! (0 Riain 2004: 5: sec also 6 Riain 2000).
Ireland continued to att t FDI 1 EU
rae \\ 11ch \\as rnamly concerned \Vtth exportmg to
marJ...c::b. Critical to dra ,. l h te
''
1
nh :"\UC mvestment \\a!) Ireland s very IO\\ rate of corpora
tax - 12.) per (Cnt . '004 . . d
K
. . . m - compared to rate. of 30 per cent or O\ \,;r m the Unttc
mgdom Bclo1 F . h
I
... ,
1
ranee, the \ethcrlands and Spain (IDA Ireland 200-t)- along \\tt
rcattvcvlowandtnt", . . . kll
and . d. , . . . cmattonaH) compctltl\ e salary costs for labour of comparable s
1
pro ucuvuy (Ftgurc 7 I 0) Th . . . . en-
tlated , , - c "ourccs ot mward tn\estmcnt were htghl} cone
In l:Cloral and ,.. aence
of the celt ,
1
.. . . .
10
h.:rnh of country of orioi n. Fortuitously. the cmcro
lC lger comctdcd ,. l b . . o T ble 7 9
... \\ lt
1
a oom 1t1 the United States economy. A a
_-- LOCAL AND REGIONAL
IN
.
so
. I ,

.... . . ..

20

......
.. ..
. .
.
.
15
.
.
10
-
;. . . .
5 -
'
'
0
- <1> (/)
E
>.
"0
c J
:::>
(.) 1:)
c - 0> :::l c 03 c c Cl3 :::l - <0 CL J J 0>
E - (/) t:: I-
- - a.>
lL
I-
<1> I- 0 <1>
en
Q)
- 0.. .c
......
<1>
z
Figure 7.10 Cost of payroll, selected countries, 1995
Source: IDA Ireland (2004)
Note: Hourly compensat ion tncluding addit ional costs (in US$). 1995.
-
PRACTICE
illustrates. there \\ere 1.025 foreign-owned companies in Ireland in 2003. employing
over 127.000 people, but sotne 70 per cent of these \\ ere in US-owned firms.
Ireland's instituti ons of govetnmcnt and governance were transformed during the
emergence of the Celtic Tiger. Confronted wnh the se\ ere fiscal and tconomic crisis of
the mid-1980s, the Iri sh govemtnent and the principal social partners {business: unions
and fanners) negotiated a 'Programme for National Recovery' which ran from 1987 to
1990. This proved to be the first of five agreements that lasted O\ cr a decade and
. . f l 1 d economic governance
amounted to a new and mnovat1ve fotm o negottate( soc1a an
!O'Donnell and Thon1a 1998; O'Donnell 2004). The content of the agreements
. . The initial aurcement was
produced by this national social partnersh1p sht fted over ttme. o
f
"' rrect parlous
concerned with en I isting trade union support for c torts to co
bl
. . . b. I. . I rc. aercemcnt were more
pu tc finances and to achie' e macroeconom tc sta 1 tty. a
1
.... .
1

. . . . t combattng tal e:xc u
concerned wtth questions of employment creanon. productn
1
" . o rt-
. d , htterl\'. extcndtno pa
ston and promoting JocaJ and regional de' elopment an more '
n h.
ers tp to the workplace I eYe I. .d J re d the origins
AI c w1 e vag c ....
though these features of Ireland' s recent development at - " .. o He am 199u,
and c . . b . nu lv contested { .
onsequences of the Celttc Ttger haYe ccn c., .
1
f the Cdt1c
2000 1 t
. ; Allen Kirby 2002. 2004 for highly cnttca
1
1
tl inns. c:rittl'" :"\m:--s
Ttge . lb . . . . . . . ) -\mong ot 1cr 1 :::
r, a eu from different theoretlcal startmg pomts b f US planb
the h , nail num
0
=
cavy dependence of the Irish econOJny upon '
1
sr
APPROACHES
INTEG
I vestment In Ireland. 2003
1 9 Foreign n ==
Table Number of compames Total employment -
-
Australia
Austria
Belgium
Bermuda
canada
China
Denmark
Finland
France
Germany
Greece
srael
lta1y
Japan
South Korea
uechtenste n
Luxembourg
Netherlands
South Africa
Spain
Sweden
Switzerland
Turkey
United Kingdom
United States
Other non-European
Overseas
Ireland
Total
9
2
12
8
16
1
9
4
39
149
1
1
24
32
9
1
4
39
4
3
17
25
2
5
118
489
2
1.025
29
1.054
286
244
890
308
.1.033
7
2.015
420
2,181
11,394
48
75
625
2,461
283
11
175
2,602
39
16
2,229
2,635
186
26
8,086
89,158
75
127,578
1,415
128,993
Source: IDA Employment Survey 2003
Note: Accounted for by lnsh financial services companies.
(?'Hearn 1998; 2000b ). Additionally, in a dimension of the impacts of
discussed in Chapter 6, some commentators cla1m that arowth rates have been cxag-
o
gerated as a result of the effects of transfer pricing. Specifically
of Ireland' s low rate of corporation tax on manufactured goods and
financ1al ( 1 ou/ ) h h h
s / o at ts m t e mtcrests of the to attribute \ ery 1g
levels of output t h . r . h . h
0
t eir ns -based plants. In this way growth that 1s for t e
most part produced by workers in the Uni ted States is by corporate
accountants to Irish workers ror t
ax reasons.
(Murphy 2000b: 4; sec also Shirlow 1995)
-
LOCAL AND REGIONAL D
EVELOPMENT
)
('R) that dependent positi h .
, . 1 ( Jl 1' . - . on In t lnten .
flrccd because the C clttc ft ger has not gcn,.
1
at1ona1 economv
b
, n l crtttcd sustainabl . . -
h!l' C'- " nona! development. e md1genou
I tnd r\,;g l . T.
)OCil ' . cnce of the ( e t1c tgcr \\ <h associated with ,
T1
e ctnC
1
g a growth of in co 1
1
. k d to the pattern of tax cuts that sec as ('.
11
. me tnequal-
tl)' tn \,; . I Lie tng the (el r
tl)' pJr
0
, ?()04 ). fhc proportion of Iri sh people at nsk of , ttc 1ger (e.g.
b '0 - - . PO\ after pens d
i(1r ) ...
1
... r payments \\ere taken mto account. "as 2l perc .. t .
2
ton:s an
:. 1 c . - en tn 003. This , .
socta .
1
e t rates tn the European Un1on. I he effect of pcnsio . d . ''as one
f the hlg
1
. nc; an soc tal tran
o . g the at-ri sk-of-poverty rate low tn I rcl and compared , h s crs
reduCII
1
. . . . ""n other Eu cotm-
on
2001
socwl protcctton expenditure tn Ireland \\as lS
3
es. In . per cent of GDP.
tn If f the rate m S\veden and the lowest of the then flftcen EL . ..
was ha o (Central
. . Office (CSO) 2005). \tturphy (2000) argues the key features that d .
Stausttc . . un erpt '1nt:d
th included IO\\ taxat1on and a hbcral regulatory framework alth
1
.
Jt orO\\ oug l maJOt tax
. f:act followed the take-off of growth (<; \\ cenev '004) e .
1
10 . - r worrymg v.
\. d inequality may be hnked to the \cry transfom1ations that :- -d
10crea c , . . . . . . generate
grO\\ th. 0 5) These state-society alliances led
to the uneven intcmatJonaltzation of society and growmg mequality. generating politi-
ten ions with which the fragmented state structure cannot deal effectively'. Thus,
Kirby (2002, 2004) that Ireland falls short of being a 'developmental state' .
but instead rcn1ains trapped tn a cycle of underdc\ clopment. Allen (2000) goes ttrther.
stH!ecsting that the Celtic Tiger story merely enduring class inequalities.
...There is something in all of these criticisn1s. but there is also a danger of underplayi ng
the major changes that have occurred in Ireland. particularly m tern1s of the balance and
interrelation between exogenous and de\ elopment. \Vhile the Irish economy
remains dominated by T. Cs and has had to cope with some high-profil e closures - such
a5 the case discussed in Chapter 6 - there is evidence that the interaction ofTNCs and
local firms ha had some positive impacts on indigenous companies (Coe 1997:
and O'Gorman 2001 ). Some foreign-O\\ ned plants have upgraded their activities over
ume through the localisation of R&D or increased local supplier linkages (Amin a.nd
Tomaney 1998). i\1oreovcr, \Vhil e transfer pricing is undoubtedly a feature of the lnsh
economy. there is ufficient evidence of real growth in tenns of employment. output and
. .
1
d d stT)' improved its petfonnancc.
exports. In generaL there 1s ev1dence t 1at tn 1genous m u . . .
notably durino the 1990s in sectors such as software (O'Malle) 1998; 0 Rtam _2000;
o 1 l l of mdus-
O'i\falley and 0 'Gonnan 2001 ). Although difficult to spectfy Y t
1
e roe.
. . . . . h th J rish state and tts govcr-
tnal policy m these de\elopments seems tmportant. wtt c -
. . . . . . d f . to rial asseb that attract
nance mstatut1ons provmg adept at pro\ tdmg the km s o tem
1
the sons of Ti\Cs that \Vi 11 contribute to de\ elopn1cnt. Ireland may ?ro: ide an exdafilnp
f
d
nd tore1gn-O\\ ne 0
a somewhat successful strategic coup I ing cen a ....,
of the kind described in Chapter 6 (Ton1ancy 1995; O' Nlalley
1 998
).
Social and spatial inequality
It . . . . d that the most pro-
ts the growth of income and spatial inequaltty
10
Irelan k specially as chis
found 1
1
r. 7 oltcy-rna t:
oca and regional development challenge
1
acmg P , d" lopmcntal
growth . . . . , b . h nctwort\ c
seems tmpltcu m the strategies dcYclopcd } t e
;
INTEGRATED APPROACHES
. of local and go, Cl nn ,
n:ak and rather con . .... . h: nt nd
frdand ha. ' 'lOllO) local arc the mcun sen tl'L' Ph)\ td, . .
\1or<'cnroth - . . 1.: "' .tt the
g0,cmancc ( c h' etght rcg10nal authortth .. 's ( \l IS
1111 d .t . len:l. At t t.: . . . . L'\el)
count) an Cl } . ti' itlC" tnd pia\ ,1 mom tot mg 10lc tn rclat1on to th,
. 1 ca J wthon t\ ac ' .. . . t: ll\e of
coordmate
0
Th. ountn is fw thcr dcstgnatcd mto t\\ o '\ L ' 1 S II reg, ) ,
, J Funds. c c "' . . t ns anct
F:L tnJCtura
1
. c responsible for managmg the rcg10nnl programmes f' h
al a emb tc n1 . . ._ o t c
t" o rcg1on PI \n tmcndmcnt to the ConstitutiOn of I rdnnd in 1 9
99
1 D "vclopment nn. ' fi . gave
\!a11ona .
1
. to local go\ crnmcnt for the rst ttn1c and made it a ma d
1 onstJtutiOna tdtu ... n a-
c ear c f. I cal -- lcct1ons to be hdd C\ cry fh e years. There arc no direct cl
q
Uiremcnt or o ' t,; . ec-
tal) re .
1 1
.., d in"tcad arc nom mated to these lc, cls b\, tl .
tion to the tWO rcgJOn3 C ' ' r lCJr
local authoritie. . . h
h I
ualttic . find thctr ch1cf ton m t e cxpandmg economic a d
Geoorap tea wcq . n
.
0
. . . b"t ccn Dubltn and rcg10ns such as the west and south-cast Ci,.
dt t: \\ . . . . 1c
. . . h a the Carholic ha\ c gl\ en pohttcal 'otce to concerns about the
\ OICC 'uc . I . I I d ( s. .
. . I I d 11 de' cloprnent gap "tt 1m re an e.g. tggms 2005: see also
,, tdemng oca an ' . .
Byrne
2004
: O'Brien 200-l ). Gcneratmg and fecdmg off strong Leon-
. t gr
0
,,
1
h in sectors uch a oft\\ are has concentrated tn the greater L'ubl
1
n
onue , recen '
region. Irish ha' c onl) ju t be_gun to ad?ress the 0 such
geographical di pari tie b) e tab1J hing a _Spatta1 to a< hicve
'balanced regional development' in \\a) whtch relieve congestton tn Dublm and accel-
erate the development of less pro!)pcrous parts of Ireland; initiating a radical decentral-
isation of civil sen ice jobs from Dublin to outl ying parts of the country and recasting
ocial polic) around the notion of a 'developrnental welfare state' (see Government of
Ireland 2002).
Some commentators ha\e raised doubts about whether the Irish government' s local
and regional development inttiat1\ es ''ill be sufficient to offset the growing dominance
of Dublin. \1cDonald (2005) has argued that Ireland 'is drifting towards a ctty-state,
\\ ith Dublin as its only real pO\\ erhouse . Official projections suggest the Greater Dubli n
area will ha\ e a population of 2.1 million in 2021, accounting for 40.7 per cent of the
forecast population of the country as a \\hole. Dublin's growth has generated calls for
ne\\ of government in the form of a Greater Dublin Authority to aid inte-
grated planning across the cit) -region (Newman 2004 ). At the same time, voices in
peripheral parts of Ireland ha\ e dra\\n upon 'new regionalist' arguments and called for
improved regional governance capacity in order better to develop their own and more
appropriate local and regional de\ clopment strategies (0 'Toole 2004 ).
The Celtic Tiger, lrish national social partnership and the network developmental
state ha\e helped to reorder Ireland's relationship with the global economy, but they
ha\ e not entire!) resolved the dc\'elopment problem:
A crucial terrain of the global political economy wi II be these networked de' cl-
opmental strategies and class compromises state and social institutions, and
patterns of a d
1
. '
J 'n mequa tty that emerge around the1n.
(6 Riain 2004: 5)
1 he Irish example rcfl h . 1
opmcnt and th . ects t c tenston of unequal growth for local and regional
e tmportance of political choices, confl icts and compromises; albeit wtthtn
LOCAL AND REGIONAL DEVELOPMENT
--------,--------
: 23!5
. f hi story nnd the external economic and political c . .
o . . . ontext. Fmtan 0 Toole
' .
1
J. ourna lt st and poltttcal comn1cntator, suggests:
'
(
2
ooJ ).
.
1
boom is 1nisunderstood as the product of
. the 1 ns 1 . . . . nco-consen atl\ c
II . .. the agenda for sustamtng prospcnty ts obvious mor' t
,
011
om1cs, . \.: a).. cut , more
c.;t.: n a weaker State, an expanston of the ethos in \\ hich
1
. h
vatt satt o ns people
pn derstood as consutners rather than as citiLens. 1 f the bo .
, to be un om ts under-
an.: r vhat it was a cotnplex product of left-of-centre values h. h h
100
d ,or ' . . w tc as
5
d d the spectacle of socta.l squalor even whtlc removing the c "
not en c . . , . . xcusc 10r
enda 1s equally clear. Wtthout a strong acttvc 1maginativ bl.
it _ the ag . . . . . ' e pu tc
. which all ctttzens have the capactty to part1c1pate we will look b k
sphere tn . . , ac
b
om as a tune of unfulfilled promtscs.
on the o
(O'Toole 2003: 168- 169)
. . dramatic experiences during the 1990s and enduring de' clopmcnt challenges
Gt\ en tts . . .
. . .k
1
, that 1 reland wtll continue to attract the attentiOn of those concerned \\'ith local
I( IS h e ) .
. nal development tn the future.
and regJO

11
high-tech-led development in the
sev1 e. '?
'California of Europe .
In Andalusia in south-\vestem Spain (Figure 7 .l l ). the city of Seville)s de\ elopment
strategy yielded much lo\ver returns than originally expected. ln the mid-l980s, the city
of - with the explicit support of the regional goven1mcnt of Andalusia and the
s anish state - embarked on an ambitious devclopn1ent strategy aimed at making
1
:e city not only the shop-window of a modem and d) namic Spain. but inspired by the
potential of technology-led development discussed in Chapter 3 m
experience of Si Ii con Valley considered in thi s chapter. also the 'Cahfomta of Europe
(Castell s and Hall 1994: 198). Yet twenty years on, there was little evidence that the
. . d. h. t rland let alone transformed
strategy served to dynan11se the ctty and Jts surroun mg m e ,
the city into the technological hub of Europe. The bases of Seville's
. tory relative to the regiOn
strategy arc described and contrasted wtth tts econotntc traJCC .
. . . . h .
1
s for the fallure of the
of Andalusta and the rest of Spa1n, before htghltg tmg t 1c reason
development strategy.
Economic and social under-performance
D . . . ''lle is the third or fourth
ependmg upon how n1etropolttan areas are Se
1
. .
1

I . . . . 1. l t I . O\ er 1 mtl It on pcop c'
argest ctty m Spain. With a metropoli tan populatiOn 5 tg
1
Y . . . d
S : . opulatton terms. dn
e\ lie ts the capital of Andalusia, the largest Span tsh reg JOn m p ... . . s nin
anic 1 d 1 ghout south-\\ cstct
11
l '
u ates a complex urban hierarchy that ex pan s t
1
rou . portant
Sevill h . . t has sen cd as an 1111
e as a nch hi story. Founded in pre- Ron1an tt mcs,
1
' , h Spm
urban ce t r . . , Arabs and latcJ t t: '
n re tOr more than two mtllennta. Ron1ans, .
11
as one of tht.
made th . . d t , d .. hub Sc\1 c '' -
e ctty an tmportant political , econotnt c an ret t:
TED APPROACHES
tNTEGRA
'
I
-\ .. \
-'"'
'

'
-' I
# ... , .. , '
I I
,', '-',
' I '
I I \
, - \
'\ '
, ,' Madnd
-
, '
,
I.
1,. I
\ .. ,, ... f .,. - - - .. \ '
. ;- SP\l\
' ' , ...,_ ,
I I I
,
I
f. H \ \ ( ' E
,
I
' ,
\
,
,
.. , .... -4
\ \
I
'
Barcelona
PORTL G \ ',, 1
.-J ', a
\
... , \L.rlch,t
'-, \ alcncta
. '
'
r .L .oretres 200
I I J
,
{
d
\
,lrlmn ura -
I
I
" 4: I I I
,,
'
I
( -"- . ,__ ,' :
(
,. , I I \
\,,., .
r
l , - .. \
,. ...., (v" '
,.. ' '
,\ndalud:t
Se't lie
I
\
Figure 7.11 Seville, Spain
,\I edit err a " e a 1l S t' u
ALGERIA
,
l;
largest and more economically dynamic centres in the world in late mcdtcval and earl
d
0 }
mo em t1mes. lts status as a trade centre was enhanced by being designed as the Spanbh
gateway to its colonies m the Americas. Nevertheless, from the seventeenth centurv
'
and coinciding with the mo\ e of the India fleet trading with the Spanish
colomes m the Americas to Cadiz, the city started a long and constant decl ine that has
three centuries. The lndustrial Revolution of the late nineteenth century bypassed
the cJ_ty and, with the exception of the tobacco tnonopoly, at the beginning of the
twentieth century the city had a limited industrial base.
By the late twentieth c t s 11
d
... . . . en ury. e\ 1 e had numerous \Veakne5ses that could jeOpar-
ISC Jb economtc futu (T bl 7 1 0 .
. rc a c ). These tncluded a lack of industrial de,elopment.
senous technologic 1 b k . . . . d
"" a ac \\ardnes5 wtth ltttle investment in R&D lack of sctent1sts an
and a d rtl f . . . ,
I I
. ' ca
1 0
compct1tt \ e finns. The overal l ski lis of the populatiOn \\en:
a -:>o re at1vely underd 1 I
tion h d C\ coped. Although the general level of education of the popu a
a 1 ncreased fi
ment' roc 5tgnt lcantly during the 1980s as a result of the Spanish gorcm
s e 'orts to . . ' II
lal.!gcd bch d lmpJo\e education and skills (Rodriguez-Pose 1996). Se,JIIe
511
"" tn most of the re t r S d espe-
cially in th , s
0
patn In general educational attatnment. an .
c number of grad . , , . . . . d The
also suffl :'ld c:. uatcs \\ tth a sctence and eng1neenng back.groun
n Olll poor act . b
1
. . to other
Andalusian c't., . . essJ
1
tty, wtth madequate road and rail conncctwns
t and the rc t f' S . 'th modern
s
0
pam, a port that could no longer cope vVl
LOCAL AND REGIONAL DEVELOPMENT IN PRACTICE
Table
7
.1.0 SWOT analysis for Seville,
-
------
-
Strengths Opportunities
Free mobility of factors (Stngle Market)
Low cost of labour
Excellent qualtty of l1fe
Strong local and regtonal identtty
Strong local and regional government
Development of Latin Amenca
Development of the Mediterranean axis
Increase of foreign dtrect investment in Spain
Expansion of quality tourism
-------------------------
weaknesses
Lack of industrial development
Technological backwardness
Defective accessibility
Lack of adequate skills
Low productivity
source: Authors' own research
Threats
Increasing competttion from neighbouring cities
Emergence of Madrid as the main economic
hub 1n Spain
lncreasmg competition in global tourism
ships, and a small and antiquated airport. Together these factors combined in a local
economy characterised by low producti vity relative to the rest of Spain. Not all local
conditions were unfavourable, however. In the 1980s, Se\ il lc had a high quality of life.
relat ively low labour costs, and a strong local and regi onal identity, with strong local
and regional goven11nents, whose capac it} to implement independent policies \\ as
among the hi ghest in Spain. Its rich hi storical heritage al so made it a cit) capable of
attracting high-quality tourism.
In the context of deep-seated weaknesses and potentially positive indigenous endow-
ments, Scv i lle faced a series of challenges and opportunities. In 1986. Spain became a
h h ... t of the Single European and
member of the European Umon) w en t e prospcc
fi b
.l. f t 1 l b ooods ar1d sen ices from 1993 onwards was alrcad) on
ree mo t tty o capt a , a our, o . .
fi
c: tl ese flo" s of capt tal and goods. 1t 1s
the horizon. Sevi ll e could expect to bene t ,rom
1
. . .
'M d't" ancan axts. The expansiOn ofhtgh-
situatedattheendof apotenttallydynamtc e Jar . . .
1 nd sea was also likely to favour a ctty
quality touri sm beyond the tradttwna sun a . EU b .
1

G. .l economiC weaknesses, mem er s Hp
known by its histori cal monuments. tvcn
1
. tl h EU regional policy.
. . . . . , fl . laga1no reg1ons 1roug
also lmphed Stgntficant mvcstmcnts or es t 1 Funds especially after their
. b fit from the true ura
Andalusia and Seville were to ene . .
1
S . h gatewa)' to Latin America and
. . b th traditJOna pants '
reform m 1989. Seville had cen e . fa potential economic rcco\ Cf) of
. Jly m the case o c.
could play an tmportant role, especJa . . . t'
1
, The threats for Sevtllc \\ere,
. . miC CriSIS 0 t l C . .
the subcontment follo\' ... tng the econo . .
1
g competiti on from ne1ghbounng
. . F. there "vas met cas" . .
however also stgntficant. trst. .
1
. ond larvest city Ill Andalusia, hnd
' .
01
Malaga. t 1e sec . .
cities, both for industry and touns . , . , J n tourism and expcncnced raptd
. fi ndatwns o . . ... . d r .
developed healthy cconomtc ou h hi stoncal ln a tttlon,
, ld also count on m.: . . . .
growth. Cordoba and Granada t:OU ' ,f. . f Keynesian thconcs of cumul at t\ c
. . ,rowth c tects o . ... . I b
exemplifying the sclf-remforcmg g d d ' as emerging as the mam Cl:Onomtc w
. .
1
it ofMa 11 . .
causation the natwnal captta c y 't. . 'tnd rcgwns across Spam.
frOnl Cl tes '
in Spain and absorbing resources
ol - - -
' 23'1
t , development strategy
The ' technocl Y . . .
. b k"d on an ambJtwus local and rcgKHl<ll dl: velonn
1
.
9"' Se,,Hccm df t: , . em pro . .
ln l s.... . economic declmc. fh1s prOJC<:t \\us aJ1Jculatcd . anncd
d ......m'' JtS .secu " . ttround U
at re re fthc bid and award 111 l9R-' by the International f .. xhb. lc Urban
treprencuna Ism o . h ' .. ' Jtr on B
en . . F h acronvm) of th<: nght to ost a \\ orJd fair in 1902 Ureal!
(
B
1
E
10
Jts rene ., . . . -_, to rn
d h
, nivcrsarv of th<: d1scovcry of Arnenca. fhc \Vorld F . ark the:
fh e hundrc t an . atr pro.
. d th " longer-term devdopment strategy called Cartuja , 93 c . was
combme \\ 1 " ' <>mmrss"
d concch cd by rhc eminent ptannct vfanuel C astclls and Peter H
1
toned in
1988. an / , . J a I Dr, .
.
1
fi tbt. theories of a fifth Kon,1rat1e\' or ong \\'ave of tech no-r <1\\'Jng
d
1
rect r rom . "conornic d
t th ,, \
1

5
;
0
n was to 'the largest tcchnocJty of Southern .
opmen . e . ... urope (C
d H II 1994
. J 93) bv puttin" together an agglomeratlon of R&D cent asteiJs
an a J -=' .... . res and lrai
. tJons cxcludin(} all manufactunng on-s1te. 1n some of the leading
1
nmg
!11.:> ' u , _ _ ate twent"
. t ""' technoJooics: computer software. telecomJnu . . tcth.
ccn u.... e ' mcatJons. . t
mater a Is. and energy and HaJJ
1994
:
194
aeolomerauon cconomJe generated by h1gh-Jevel functions and fast grow . ). fhe
-..b - mg mdustri
were interpreted as a su!>tamabfe local and regonaJ economJc structure Th . es
. . e SJte and
buildings used for the Expo 92 were to be recycled to host the high-tech fi
technological and cientific park at the heart of the Cartuja 93 project. rms of the
The strong high-tech emphasis of Seville's development project was in
1
.
. . une wtth th
vision of a modem and dynamJc city of the leaders behind the proiect A p e
J s Jgure 7 12
shows. this vision was three-pronged. f irst. they envisaged Seville as a ct h

1
Y t at would
Seville the \ hop-window of a modern
and dynamic Spain
the economit: atld
techn(l/ogica/ brid h
/;urope
tmd Latin America
F"
Seville
Seville a., motor of the Andalmian
economy and a the main
tecJuwlogicul pole in Southern
Europe
'-----..1 tgure 7-12 Seville's .
SoJJrce: AIM , sttategtc vision
ors own research
REG I 0 N A L 0
. --=.. E_v E-=- LOP M ENT lr p R ACT ICE
"Ct as the shop-wmdow of a modern and d , .
a . ynam1c Spai n s
the economJc motor of the Andalusian rc ' . . I . eeond. Seville would b
. S gJona cconom ecome
gnnvth pole tn outhcrn Europe. And finall v S . y and the main tcchnolo , I
bridge hctwccn Europe and Latin America T .. h, cvllle would act as the techn I
. - c general ai o og1cal
rest of Andalusta tnto one of the economic m was to tum Seville d h
. . . motors of the S . . an t e
Ltnkl ng the local and regiOnal dcvelupme t pan1sh nat1onal econom
1
n strategy to a f; _ y.
visible event sue 1 as a \Vorld Fair had imp rt ar-reachmg and global! ,
. I . o ant advantage . r .
g
cncraung a argc and political conse s. rst. 1t contributed to
. . nsus around the \ 1
development strategy. A 11 the key mstitutions , k e ent and the associated
. .vere een to b
development effort for the Expo '92 and the Cartuja ,
93
. c seen take part in the
zontal and vert1cal coordination of government , d proJects. This led to the hori-
an governance
multilayered this involved h
1
mstltuttons within the
. t e ocal eovern
driving force w1th the support of the Emplovers' C t': d . ._ ment as the mai n
f
J on.e eratJOn the loc 1 t d .
the Chambers o C ommcrcc, a series of lobbies d h ' . a ra e umons,
. an t e populat10n f h
whole. through a senes of initiatives to encouraQe c ,
0
t e Ci ty as a
. . . ' ...., J\ tc engagement and pop I'
ipation. Vertt call y, Jmk1ng the different scales of go , u ar partJc-
. ' emment and oovernance in add"
tJOn to local government: the Andal us ian regional govern h So . ' ,_
. . ment. t e pamsh government
and the European Lnton became keen contributors The r.
1
th h '
. . . .
1
ac at at t e t1me. both the
Spamsh Pnme M1n1ster and the Deputy Prime l\.1inister \"e fi s
1
.
. . . ., re rom ev1 le certam1v
helped m secunng th1s support.
Jntegrating both indigenous and exogenous approaches to Joca) and regional devel-
opment, the actual strategy for the Expo ' 92 and the ( artuja 93 projects was based on
four pillars: investment in infrastructure, improvement of educat.on and training. attrac-
ti on of inward and image promotion of the city and the region (Figure 7. 13 ).
The plan was to set up the basic conditions for the attraction and endogenous genera-
ti on of high-tech industry. as a way to materialise the idea of the California of Europe'.
J n practi ce. the strategy tilted towards two of the pi11ars. Seville launched an aggressive
image promotion campaign throughout the world. It aimed not onJy at promoting the
Expo ' 92. but also at dissociating the image of ScviJie from that of a traditional tourist
centre and creating that of a forward-looking city-region. capable of Jcading Southern
Europe into the challenges of the twenty-fi rst century. The second pillar prioritised was
infrastructure development. A huge effort was made to transfonn the endowment of the
whole city and of Andal usia in a peri od of barely six years. Not only was the island of
Canuja on the Guadalqui vir ri ver prepared and developed as the site of '92, but
)
. . r. t r'thJ'n tl...c citv were tmproved.
a so all accesses to the c1ty and transport m. rastruc urc \\ '
11
J
. . b "It the ring-road around the c1ty
A ne\v and modem airport and railway statiOn were ut ' .
. .
11
h M drid and the other mam
was fini shed: and the hi ghways linkmg Scv1 e wtt a . . .
. . . - . - h k . 'aS the first htf!h-speed rail hnk
cntes 10 AndaJusJa comp1eted. The tcmg on t c ca c \\ ""
. S d d , red on ? 1 April 1992.
m pam between Seville and Ma n . maugura, - . 1
I
unications mfrastructurc was a so
rot all the emphasis was on transport . Tc c:comm . d d a
. . . h . Cartuja Island sttc were esgne
at the centre of the strategy. The butldrngs
10 1
c r:
1
th oughout the city.
:. . . . , blcs were ust:d y r
mtelhgcnt but1dings' and opttc ca . . . h. 'orld in tclecommu-
k
. f
1
t advanced ctttes m t c ,.,
ma mg SeviJi c at the time one o t 1c mo::, . . f he time Felipe Gonzalez.
nications infrastructure. As the Spanish Prime MtnJstcr
0
t '
put it in a speech on 28 November 1990:
A p p R 0 ACHES
INTEGRA T E ,;:;._,;_---
I
b
I
c:
sq,
fl1
te'
1,
e"
a-v
Expo'92
World Fair
Cartuja '93
(9&
Figure 7.13 The pillars of Seville's development strategy
Source: Sev1lle Authority
'P
......
tP
the Expo '92 gave us the opportunity to make an enormous effort in the devel-
opment of infrastructure - highways, high-speed train, optic fibre, telecommu-
nication systems - the excuse and the stimulus to do what, probably without
an event of this nature, would have taken decades to do following the normal
priorities.
And all this Iocr 1 d .. 11 d Hall
a an rcg10nal development catnc at a price. As C astc san
19
7_) underline: "between and 1992 alone some $ 1 0 bi 11 ion (US) "vcre spent on
3
vancty <>f br ,
.. pu c works progran1s in Andalusia'. uch
I he cducat ion a ld t .. . , however. m
,,
1 1
ammg p1llar ol the development strategy was, . \ere
wcdkcr. Although . l . . 1 f education '
.
1
. . su )StantJve unproven1ents in the genera) leve
0
tine
etc Hcvcd tn s ,
11
. . . . f genera
..._ C\
1
e c1nd Spam during the 1980s, 1 ittlc was done tn terms
0
LOCAL AND REGIONAL DEVELO
p MEN T IN PRACTICE
I
. t\ J'lt; or graduates needed to sustain the kind oft h .
t 1 . cc nologtcal or , h .
t
( astells ,tnd llall. The expan-...ton of higher cducaf . . c O\\ t pole envtsaged
1)' ton, mcludmo th
University' concentrated on humanities and social sciences T; .c creatton of a new
, wral and, abo\ e aiL engineering and soci'
1
. e Imbalance between
na . . a SCtenccs and the " h
f
1\ ndalusia rcrnmncd the h1ghest in Spain (f> d , art m t e whole
o . . . '
0
nguezPosc 1996) \v h
to the in\vard mvestment p11lar, 1t was somehow expected th
1
. 1t regard
. . at t 1e supplysJde ap . h
linked to inlrastructure upgradmg would suffice to att. t h proac
rae t c relevant forei()n f1
Repli cating the problems of exogenous approaches in Chapt
6
h . o .
h cr t e support to ex1stmn
indigenous finns tn t c C1ty-rcg10n was overlooked h b . o

1
. , on t e asts that their
existing sectoral c;pecta tsatlon and weak competitiveness hardl fi d h ..
. . Y ttc t c grand VISion
of Sevi li e as the matn technological pole m southern t.urope.
uneven local and regional development and the
illusory 'technocity'
Despite the grand vision and huge effort committed to the local and regional develop-
ment plan, the economic evolution of Sc\ illc in the years following Expo '92 has been
lack lustre. lts G D P growth between 1992 and 2003 puts it in the middle of the Spanish
prO\ inccs, mostly due to a significantly improved pcrfonnancc since 2000. In fact, with
respect to the rest of Spain and Andalusia, Seville experienced worse rdativc
economic performance than in the years prior to Expo '92. As can be 5ecn in Figure
7 .14, which plots the growth of GOP in Sc\ illc and in Andalusia relative to that of Spain
using a two-year average, while Sc\ illc \Vas performing better than Andalusia and the
Expo'92
200 I _
180 --. -----
160
-
140
120
--
100
80 &..--
60 ..._ --------

---
40 -!--- ----------
-
-----------
--
- --
--
Seville
Andalusia
_- Spain
--2 per. Mov. Avg. (Seville)
__ 2 per. Mov. Avg.
(Andalusia)
20
o
94 1996 1997 1999
1980 1982 1984 1986 1988 1990
1992 19
19BD-200:1
da/usia and spain,
Figure 7.14 GOP In Sev/lle, An
. using INE data
Source: Authors own elaboration
ppROACHES
I
I
<.) 1..)(} tnd in the '' akc of thL' Jl)t)') \\
t t ht: (' ' ., Oriel I'
, r of rhroug ltHl
1
.
11
1',
111
,, a ned. f he pat t h .. ularl) . ll r,
n.::.. conon11C n.ll . . Pntunt
rt'(.' tlw L . 1(' t>f cn:..tcn1 ,l, \ lmerrt nt'd o , nt
,, l t'tll"Pfl)\ 11 l. <I " ' ''
, . " 't)rnc t.: , f s . .t
'' tth r:..pt,;d t( . , b "Cil tht: <..) ndnltL m .... p,un. <II \ er I .
, cnod h''' t: t: - l t h.'
that 1n rhc :-.t tnL P .. d ,
11111
,m of C\ rlk c1nd tb potent tal h' bno ..
1
c. II
d
(lrnphll: ' Jh l.:onom
fl' ch lngh ' ( DP ncr <..\tplta been \\ Ot "'--' rc
. , rdati\ c decline Ul J t .
Nlm th .. thL il , tk ccom>nuc pl'rfonnancc rt:produccd 111 nth,
-
1
, " unc\.pcctc< ) \H.:. cr edlnh
t'' t1 t. i f' Dl L' \ tlk " uncmplo: n1ent tcn<..kd to
. , 1 lovrncnt nn<. . , . .. '-hltl\c to
... .
1991
(l'il:rurc .,.15). lhc \\hole ot ckspttc rc
1
, ,
h k' cb smcc - -=- .
.. pants tl , p
111
i-..h populatwn. tnanagcd to attract onh arou,.d J r. "'
d 1 , cr cent o lt < ., -.\) per
aroun l P . .. , ..,
00 1
wd .2004 ( 'pan1sh f orctgn In' Rer,istr") fh
Ct.'nt of wwl r Dl bet\\ t:t:n - . ' . . . . ... . .... -' ere
.
1
.
1
.. , d nee
111
the Cart up l ,t1nd of the "-.mds ot htnh-tcth in .
I' ,Ji-;0 prl'ClOU Itt t,; t,;\ I t: o \C t-
' t the proJeCt " as ed tO .
.
11
. loc
1
1 .
111
d n:oional de' clopn1ent not del n creel? \Vh)' i t1 e
1
e
11
-ttl
\\ h\ ha' e' 1 e !> ' ' ... , e
.
11
,.. of the ambitiou" the C art uj a 93 proJect was sup oscd to
,
1
gn tn C\ I t: '
- ) It tnt"' that the un regenerated large parts of t'le cih
ere:ate. 1 "' '>
but there
1
carce c\ 1dence of the tnnovatton pole \\'as_ to become the
economic motor of Andalu. td And although - dcsptte sen ous problems in finding
tenant until 1999 - the of Cartuja '93 i!> nO\\ in full occupancy (V aLqucz Barquero
and Carrillo 2004). the majority of it i!> not occupied by the type of high-tech tenants
original!) planned. Lei ure spaces {the theme park Isla Magica). offices. and public
250.00
Expo '92
200.00
150.00
100.00
50.00
0.00
&)
F'
---._) tgure 7.15 Unem lo .
Source: Authors
0
,.
10
P yment m Seville and Spain, :1986-2002
. elaboration usmg INE data
- Unemployed
LOCAL AND REGIONAL DEVELOPMENT IN PRACTICE
and uni \ buil dings dominttc th. 't
1 1
.
.. l l; sJ e. O( 1n tune with Pc rt ' 1 t
and l lotH.l a !' nott on of the crcativ ..
1
. . l , ' . > cr s c user
. \; c ass. t Cartuja Island is no ,. d'
of a d u .... tcr th'm a real technology site F. , . ays more
' cw tenant firms conduct R&D and h
of R&D cf tott is associated with the . .
1
.. . muc
. nee
0
publ1c centres
V.. hy dr d the vtslon of Seville as the ted
1
.
1

. . , "
1
lno og1ca rnotor of southern F urope not
matenalt sc. Some 1avc put the blame on the cc< n . d
, t . > omtc ownturn that affected the world
economy after 1 ) ) 1 1992. 1 he recession in th , U . d c
. 1
1
e n1te .,tatcs Japan and
[=. uropc thwartcu a argc percentage of the potcnthl h' h
1
. ' .
. ' tg qua tty F Dr that mtght have
come from tcchnologtcall y advanced countries (Va;q , fJ, . .
. . . . . uc; .>arquero and C arn llo 2004 ) .
llowever, ctt least some of the blame lies 111 an ovcramb't 1
. . , 1 tous vtston t11at tned to trans-
form the econon1y of the ctty radtcally. creating -
1
technol
1 1
.
1
.
1 . . ' ogtca po e ex 111 11 o and
ignonng some of the harsh economtc and social rctlitics of the t
1 . , m crnat10na economy
and the ctty.
ln addition. the strategy was applied in an unbalanced wav. Reflecting the
1
. d't' 1
ra 1 10na .
top-down and ' hard' assets approach to local and regional development introduced in
Chapter l , far too much weight was put on infrastructure. The advantages of this sort
of strategy were clear to see. Infrastructure development was visible, swallowed an enor-
mous amount of cash, and, above alL proved relatively easy to deliver and popular. In
particular, it provided a lot of ribbon-cutting photo-opportunities for politicians in the
run-up to the 1992 World Fair. As V\e noted in discussing the indigenous interventions
in Chapter 5, developing human resources and local finns is longer term and less glam-
orous with fewer spectacular advances. 8) 1992, the human resources in Andalusia
il l prepared to assimilate. let alone generate. an advanced technological pole. Much of
the expansion in higher education had taken place in and social science,
subjects that were le5s costly to teach and where teachers could be easily found. but t.hat
could hardl y generate the sort of labour force that could attract htgh-tech finns or stun-
ulate innovati on. The indigenou assets of local and regional firms. whose day-to-day
d t h log)' park of the \ were left
reality was a \vorl d a\\ ay frmn the sctence an cc no ....
to fend on their O\Vn and not brought into the project. .
d d nt on tmav.c
This unbalanced approach left the whole strategy of the epen e .
u 1 h . k industnal fabnc and madcquak
promoti on and infrastructure pro\ tstotL vv tt a \\ ca .
. . , . . . f hi h-tech FDI proved almost Jmpos-
hurnan resources to ful fi l the vt ston. the attt act ton o d . r"inforcing alter-
. . ,. ha' e contnbutc more m t;
siblc. 1 mprovements m mfrastructur(.; may .
1
ornic base. than
. h M. d . d wi th its much strongeJ ecot
natt ve development poles. sue as
1
a n h rket .Yl any firms that
b l f Se' il le ' s output to t c ma ..
in guaranteeing the accesst I tty
0
. . h , been forced to clo. e or
. . . A dalusia from the ctt) a\ e I
to sen 1cc Scvtlle and westctn n d .d S 'til e highway {Holl 2004). n
. . o f the \Ia n e' . . 1
relocate to Madnd smce the opemno
0
. d b\' inadequate mstttutiOna
t g) \\ as furt her marre .. . h
1
addition. Sc\illc ' s dcveloptnent stra e'"' d aovemancc. 1 he "
0
e
. . h . tem ot aoyernment an o . d d ,d
arrangements and tens tOns tn t e S) s o. .
1
I f the agents tn\'ohc ten c
tic dcfectwn. \ an)
0
t1 t'ng
process was not itnmune to opportunts . f the collective good, re ec
1
. t lt the
0
and
to defend thci r own particular mteres ' . t butcd to blur objecttves
1 n aaents. Thts con n n d Hall
shifts in the balance of power bet\\Ce o . , II documented by Caste san
. , of the proJect, '' c d ision and
to sudden changes m the stcenng large gap between a gran
. d tratcs how a d l t rests over
( 1994 ). Scvi llc ' s cxpcncnce emons . h d minance of indtvt ua
10
e
. b a . we II as t c o
the existing socio-econorntc ase s
.2441
- -
INTEGRATED .4PPROACHES
. . . contributed to the generation of an unbalanced loctl ,
Hecnvc mten . .:')b &; dlld rc ,
co t c')' which yielded n1uch lower results than original!)' i t gtonal
development stra C.::- n ended.
'
.b ralisation continental integration and
Jalisco: I e . ' .
indigenous industraal revtval
c
1
. g ,vith the lack of cotnpctitivcnc'" of its key sectors th
.:>tmgg tn . . . e state of
Jalisco in Mexico has tts long-term cconomtc dcclmc through integrated.
sustainable and indigcnou local and regional development pol icics.
Industrialisation and diversification

l
Jalisco is located on the Pacific coast of rvtexico (Figure 7. I 6) and has a population of
over 6 million. \Vith almost 4 miJlion people living in its metropolitan area, Guadalajara.
the capital of JaJt co. is the second largest city in Mexico and has historically been one
of its three major manufacturing centres. Guadalajara's and Jalisco's industrial base
took off through the early stages of economic transition in the 1930s: supported by
the govemmenfs import substitution industria]isation strategy which lasted
until the mid-l980s. Aimed at reducing Mexico's dependence on n1anufactured prod-
..
'
____ .---,
I "
: "
N IT ED STATES
I Quartto
2 Htdal!'l
3 P ebb
S Mortlos
S ' 1
Pacifu;
Oct an
I
.,
.: \
I r ..
,_.. ; Chthuahua '\
t I \
... Coahuala /
f I'\ ' \
", , ' .... ,-{ '
' ... : - ,' \
I t
,' ' Nuc: "-
' ' ' ..
c;
11
uto , r>oran o ', _ l.e4 )
- .. < .... .- - r
" - ' -..._, I , - .. ,
'._ , l\1 EX! cp m .. uttpas
G ,, 1 f 0 f M e x i c o
;-, 7..ac:atc<.a ' ' /
# ... 1 , ' -.
.r
, Na)ant f ( Poto\ --; ..
/ f j ., .. .- I
<., ]' ., .... ,,, '
Gua J iiiP , ... ,, '
..., :
1
, ' _' .. Yutat.in,' -q
,, I 21/, ,
""' ' - \. .,., .,. . ' -. . ,
... ._
1
' , , , J , ru1 , ,
7 .-- '4 ..... 1' ' " ')usot.anz
Mt t ou n ,' C t, / "
I 5 l ' .
, - ..... " \ " , ( ... I 3 , ( . . I I ....,..J
I f -- J I
... ,.11 --' '., , __ _ , .
(Jucrrcrl> 1 , , 1 , ; .. - IJ I' L 1 JZf.-
' .... , ... ..J J J .;
-- -.' , -..... 'll
-.......,.

I
: rtt1 11, ....- _
.. -- I -- I .?;)'I) t; R j
G L AT A L. \ !-""- - I - I
Rgure 7.16 Jalisco M .
, eJCICO
(
LOCAL ANO REGIONAL DEVELOPMEMl
n IN PRACTICE
ucts the policy transformed Mexico into the second lar, t d . .
' . . . . gcs m ustnal economy 10 Latin
An1cnca. behtnd Bra/tl. Mcxtcan tndustry became fund
11 . . amenta Y concentrated around
three urban poles: Mcx 1co Ctty m the centre of the country M t .
. . . . . . , on errey m the north. and
GuadalaJara tn the west. With a dtvcrsthed manufacturing ceo b d
. nomy ase on sectorr,
such as food. tobacco, beverages. fabncated metal products chemicals bb
1 . . ' , ru er, p ast1cs
and tcxttlcs, the economy of Jahsco prospered under much of the import substitution
industrialisation period. H owevcr, the lengthy period of economic protection fostered
industries capable of benefiting from captive markets. but that had little incentive to
respond to changes in market demand, innovate, apply new technology or increase
productivity. Much of the industrial capacity in Jalisco evolved in ways that became
increasingly vulnerable especially to international competition. In any case. much of the
industrial tissue of the state was seriously vulnerable to competition.
By the end of the 1970 Jalisco s manufacturing base was beginning to show the first
signs of exhaustion. and GOP per capita in the state started to grow at rates below the
Mexican average. Industrial decline became even more evident during the l 980s as the
Mexican economy became n1orc open and liberalised from 1985. As Figure 7. I 7 shows,
Jalisco started to grow significantly below the national average. industries
struggled to adapt to the challenge of greater competition. leading the state into a
but unrelenting process of economic decline. This trajectory _contrasted wtth
the relative economic dynamism of the Mexican states bordenng the States.
S
. the mid-1990s however, Jalisco has managed to redress th1s proce.ss of
tncc ' d argmallv
economic decline and bring its economic performance back on a par an even m .
8.00

i
600
4.00

2.00
'
0.00

-2.00 t
-4.00
-6.00

-8.00

-10.00
-12.00 Y:>
fl.. ('}..0) C?>l), 9 ,.,
AJ\, 'JJ() q)J 'O%V 1"\. ,, Oj).l Oj\ (5
-' , ' 1"\., cr, &_J ".1
\:::! 1\. ,...._; 1\. (() 1\. .... J -b v v
:1.
9 7D-2001.
o and
Agure 7 17 GOP per capita, Ja/lsc
, I boratton USing INEGI di:tla
Source: Authors own e a
Mexico
Jalisco
_Poly. (Jalisco)
_Poly. (MexiCO)
INTEGRATED APPROACHES
-- -
f
\l'\.ico. Figure 7.17 re,eab JaJi sco's rc,italised C'TDP,
1
c,cced that o c . . . . fi . P
0
' tnent .
tJ
thai ha' been achtc\cd '' tthout tctng the qualit' t' 'tnd
tn' cstmcnt gro\\ 1 ' . . . J o '
b
'. a
011
the kind of to'' road '->trategy m ?
0
) lllcnt
and em ar"-tnb . . ne ot
. d _. , t turnaround has been an t:ffecuvcJ) and itnpl , the
matn rt\t:f::, o cmcntcd 1
.
1
de' elopmcnt trate<,) b\ the ttttc Go\ ernn1cnt. built arout'd th OcaJ
and rcgJOna e "' . l c p1 n .
f
. no the state's de' dopn1et1t potent tal. Ora\\ ing
1
ctple
0
maxnn1s1 ;:, ' ;:, . ( n t 1e l\lf1
. .
1
ns di cussed in Chapter 5. the strategy has contnbuted to tl'. d of
tntcn en 10 . . C gcncrati
f a
lmost
4
oo 000 pernwncnt JObs bet\\ ccn 1995 and 2002. to ratse the n Lllnbc . . on
0 c . t Ot Cnt
--neurs bv 17 000 in the san1e pcnod. and stgntficantJy to ratse the flows
1
. .
pn.: - , . . , . . o 111\
mcnt into the state. both from othet \ 1c\.tcan rcgtons and fron1 abroad (data fl
) 1 dd J 1
1
om the
tate. Economic PromotiOn ccrctanat . n a ttl on, a tsco has n1anaoed t .
. . . o o curb Its
declining hare of \1e'\tcan C\.por1s. whtch \\as the norn1 dunng much of the 19
.... . , . , h , , . 1995 . . Os and
early 1990s. Stnce launch 111g o I t c strategy m . , the pa 111c 1 pat ion of.blisco, s
industries m s total C\.pOt1'\ (c\.cludmg otl) has nsen conttnuoush fir c
. ; om .1.S per
cent of the tota1 in I 995 to clo c to I 0 per cent In 2001 (\Voo G6n1e;.: 2002) Th .
. . . . e
10
n m GOP. emplo}mem and e\pOrt> has retamed employment quality as most of the
new JObs have sa lanes that range bet\\ een t\vo and five ttmcs the minimum wage (\1\V)
level (Figure 7 .18).
Liberalisation, continental integration and indigenous local
and regional development
\\'hat explai.ns the relati\C turnaround in Jalisco 's economic developtnent trajectory since
1.995: Mex.co. has undergone profound changes since the mid- 1980s. Impor1 substitu-
tion mdustnahsation in place since the 1930s gave way to a relative opentng of the
econ?my through of GATT from 1985 and continental economic integra-
tion tn J\:AFTA from 1994. Econotnic liberalisation \vent hand-in-hand with political
change. After more than fift'- . f 1 b h .
; )ears o rue y t e Revolutionary InstitutiOnalist Party
1994 0 2000
7.6%
5.1%
Without

mcome
6.1 %
3.5%
6.7% 7.5/o
Not defined Less than 1 MW
38.1 /o
13.2%
8.3%
1
-
1 to 2 MW 2 to 5 MW More than 5 MW
Figure 7 18 S
. alary structure ;
Source: Calculated frorn G n the Guadalajara Metropolitan Area, 1994-2
00
overnrnent of tt
le State of Jalisco (2001: 80)
LOCAL AND REGIONAL
. . DEVELOPMENT IN PRACTICE
( PR 1 ), oppO'\ItJon governors began to be t .
. . . ., . . . n: urned to off! f
Ru t lo tn BaJa C aliform a 1n 1989 (Shirk
2000
tcc .a ter the election of Emest
. I. . ). fhc clcctto f o
had 11np 1cattons for state. local and . , . n opposition govemo
. . 'eglonal dcvclopr . . rs
of the oppos1t1on were keen to their c . nent strategtcs. as member
clpactty to deli ,
(Rodrigue/ and Ward l995: Dia/-Caycroos
1 1 2
\Cr sound economic policies
e (I . 00 l ) ln J r . ..
change led to the approval of an d,
1
a tsco, such an electoral
eve opmcnt plan forth
of Alberto Cardenas of the A t P estate. The election
c ton arty (PAi\) G
in 1 995 brought a young and dynamic team i t . ovcrnor of Jalisco
' n o govctnment One of th , . . .
the new state government was to set up a com .. h . c pnorttlc:s of
pn.: cnsl\ e de\ clopmcnt l .
onl y at stemmi ng Jalisco's cconotnic dcclmc but
1
d . Pan auncd not
, a so at a dresstng the , .
proble1ns that Mexico's 1994 1995 . . scnous cconomtc
cconomtccnsts k.no\\nasthc'l .l f'
had generated for the state. cqut a c teet ' -
The nevv strategy sought to mobilise and build upon d. .
. m tgenous assets by tdcntifying
key de\ elopment sectors, and trymg to minimise econom b .
. . 1c exposure y supportmg
a d1 verstfied of local sectors whose compcttttvencss had already
been tn response to natiOnal economic liberalisation (Government of the
State of Jal.tsco 2001: 87 Woo Gomez 2002). A series of nested niche strategies
were to focus support on existing sectors deemed capable of competing in
a more Integrated and global economic context. The indigenous priority of the strategy
did not impl y disregarding the exogenous growth of attracting and embedding FDI in
.Jalisco.
Localising and adding value in agricult ure and tourism
Among the strategies aimed at traditional indtgenous agriculture took an
itnportant role. The government set up schetnes to reinforce and promote links between
agriculture and industry by strengthening existing production chains and trying to retain
as much value-added as possible within the borders of the state (Government of the
State of Jal isco 200 I: 125). Traditional sectors which were amenable to local processing
were prioriti sed to sidestep barriers that limit trade in agricultural sector5 and minimise
. . d.fi d d These sectors
exposure to the volatile pnce ftuctuat10ns of commo 1 e pro ucc. . .
. . . (
1
1 t fi om\\ hich tcqutla ts made)
mcluded tnany natural med1cmc plants. the agave t 1e Pan r
. d h us ket local and
as v-'ell as green house produce maml y targctc at t e mar .
. d h as an early cmphns1s on
regional development of agriculture was 11npot1ant an t ere \\
organic food and better management of resources. . f h
. , . . I ddit ion to the promotwn o l c
In the service sector. the ma111 focus was n a .
1
.. 1 and
. . h stratcay targeted c<.:O ogtt .t '
maan coastal resort of the reg10n. Puerto Vall arta. t e o . .
. . . . . . . h state encouraged rural toll''"lll m
senaor ctttzens rather than trad1tronal tounsts. T e . d .
1
, otourism in mianJ
I
ft n combtne wtt 1 cc .
haciendas and rural houses and hcalt
1
spas.
0
c . . . Other tradi-
. . . I oast'tl tounst
areas. relatively jsolated from the tradlttona c (
1
,
1
.. f't. furnilllrt:.
. -- d such as oca cr.t .
tiona] indigenous sectors were also pr .. d , elopi ng
h . , cctors was on Jt; C\ ....
jewellery and shoes. The emphasrs rn t CSt; s . . nd assisti ng
. . f matcri(ll s and outputs. a
crafts training in1provmg the quahty
0
' ' f J 1 700 I 111 1 34 ).
(Government of the State o a rsco - -
APPROACHES
INTEGRA TED--
. t ial redevelopment and SME upgrading
Indigenous rndus r .
d
111
itnportant. the ot the local and rc!..!i .
1 . , lture ;tn '" onll de , I
\Vhdc ..Jgfllll . . f on In to the hi gh-r , 'c
tfort U1 oc \.: Xogcno
oprncnt c . f ( J to lurt.' nc\\ ,cctob to the through lHt t' (' r , Us.
d , t '-'(lte 0 tn n-
oncntc :-trcl c= ha
1
"cd the t 1adtuondl IO\\ tcchnolog) '-CCtor, lh t rng
FDI crnp l l
plans or .
1
. d tnal tnbnc ,utd thiJt \\ aiJcad) ctnhcdded m tl . up
l
.. ot the loca tn . le region
t lt: . . d. .. .
111
,1dc tor ,1 son1C\\ hat .
Althoueh tht U1 Jgt,;nous - ' It turned
b
..... a tratcn\' that \\
out to t,; ' b. 1 d h d d I
h
\ tE supr)ort cc 10c t c tn tgenous eve optncnt appr h .
0' era II. t c t ... " . . f . . . . oac In
. . . , \\ere bd'-Cd upon tht pt O\ o select I\ c tnccnt tvcs fl .
Chapter ). lntttatt\ c . , . . . . . . . . OJ ntche
" . of tram me and R&D t,1c dJtte . and factlttattng accc\s to fu d
-.ecrors the crt:atton .... n and
. '
1
rt fior rrequently through \ cnture capital funds Ta
financta . rgeted
e me
a ure ,, ere aJ,0 u cd. as the Improvctnent of \'OCationat tra
human re ourc . mmg
I
. the concenration of tor graduate and postgraduate traint n ."'
c 1emc or . g 10
areas. Support to the large nutnber of local SMEs 1n the region took centre
\ Iar
oe net\\ of and research centres for SME5 so 11e part,all
1\tage. ; o . )
financed b) the pri' ate - \\as created to cater for the baste need5 of Stv1Es and
to improve production and con1petitivcness in the supported sectors. The network of
centres seek to help local S\IE5 to address the challenges of the new economy
b) promoting the use of IT in firn1s, by helping with software and advi sing SMEs ho\\
to engage in e-commerce. Tht5 effort has been combined 'Nith a series of n1ea5urcs to
reduce red tape and encourage 'electronic go\ emment' in public institutions. The
addre sed S \JE needs including financial !)Upport. the protnotion of an entrepreneurial
culture. qualit} control. improvements to the packaging of products. technological
support and ad,-ice on intellectual property, and access to information. Centres ha\e also
been established for ad\ ice on merger!) and acquisition and on the creation of indusrr:
for the promotion of innovation. management and tnarketing. and
trade. as \rell as for the improvement of local crafts and for the development of essen-
tial infrastructure. Echoing the importance of strong regional government in leading and
driving local and regional development strategies discussed in Chapter 4. the
Government of the State of Jal isco. through its ministry of economic promotion, is at
the apex of this intricate net\vork of support centres.
\Vhile the fundamental focus of Jal isco 's local and regional development strategy has
been the S\tEs which make the vast tnajority of finns and the largest proportion of
employment in the state, larger finns and the cxooenous approach of attracting and
embedding r- 0 I ha , b
1
b t finns
. \ c not ecn O\ cr ookcd. Attempts have been n1ade to connec
m sectors that could create links to existing networks of SMEs and thus help to embed
production in the stat St h . . . h ('.t frorn
. . e. cps ave been taken tn order to facllttate the s
111
trad1t1onal maquila bl t" the
. - assem Y plants created under a scheme of tax exempt tOn or
export of output - to d creas-
. . sec on or thtrd generation n1aquila. These arc plants that
10
.
mgly substitute forcig d o wtth
1
.
1
.
0
Inputs tn the ar\:as of technology management or
OCd mputs (Shaiken 1993) rvt ' cro\ern
n t
1
uch of the foreign direct investn1ent the state o
len las sought to attr t 1 b . . Jd b
lish -"d
1
1
ac las een m sectors \vhere production chat ns cou c
e wu 1 .ocal finns at i b i Th tate ha.
lC em ec ded for local and regional de\'elopn1cnt. e
5
Conclusion
'Local and regional development in practice' the main themes of this book criti-
call y to analyse the experience of our international case examples. The local and regional
de\ elopment stories of 1\orth East England. Ontario: Silicon Valley,
Seville and Jali sco emphasise the importance of our central concems. \Vlnle workmg
. . . . . d h 1 ce has faced the shared chal-
wtth particul ar lnstones, legaciCs an contexts, eac P a .
. .
1
1 d 1 de elopmcnt models m a chang-
lenges of grapphng wtth appropnate oca an regwna ' .
d stria! dccltne (North East
ing context. Comtnon projects emerge whether managmg m u . .
1
.
1
. ) k to rebalance the nauona
England). attctnpting adju tment (Ontano. Ja tsco see mg . .
11
) d
. f o traiectory (StiJcon Va ey an
economy (Busan. Ireland), trymg to sustam an exJs mo 'J f ,hat
. . . 1 fi . -1atjon (Ireland). Questtons o "
ern barking upon (Sevtlle) or dealmg wtt 1 trans orn h '" Elch place ha .
. . d \\hom come to t e 10tt:. -<
ktnd of local and regtonal de\clopment an or .
1
d lopnlcnt m its own par-
h
. f I al and reoJOna e\ e
had to find its O\Vn way or synt est.
0
oc . z::,
1 1
d r"'gional development
. t d theones of oca an t:
ticular context. SimJlarly, the concep s an . bl "rns and che kinds of
h d'agnosrs of current pro t,; -
arc central to deliberations about t e
1
. flu ..
11
ce them.
. 1 t m 1ght shape or m t.: .
strategies interventiOnS and poltctes t
1
a . f industrial t:":onlH
11
Y au
' . , ., the declme o an ,
North East England is scckmg to manage ... f K ,ncsian state
TI)' and the retrl:at
0
e) 11 armng
uneven transition to a servtce cconot fi r , the limits rcgwna e
. . . d stment and JJlCJtng .,
Ontano rs atten1pt1ng cconomtc a .JU . . d
1
. :'\orth Amen\:an reg
. ntal intcoratwn an I s .
econotny in the context of contmc
APPROACHES
INTEGRATED_ . .
. iL dynan1rc htgh-tc\:h and '-' <.: ,
l'"' is tryuH! to sus .
Silicon Val t:) . nncnt n1odc1 in the face ot grO\\ mg of s .
d ujonaJ dcVC OJ . . OCJal
b
-ca local an rce . b' lt.t)' as well as rntctll,Hional \:On1pd ttr on 'tnd .
as . , v and sustmna
1
< nvalry
-.parial mequalrt... , Busan is '\et:J.. ing to benefit frorn the stronger loc
1 . d "tnal '\ector_:). . . a and
;11 ItS leadmg m u ' bthncc the tcrntonal devc lopn1cnt of the nat"
. . developed to rl: ' ' . 10na1
regional pollc) . .
1
ncqw1Jittc') drl\ en by the growth of the capita] S
d
narrow the reg1onct
1
' . . eouJ.
economy an . h the cconotn1c and socJo-spattal n1cq ual ltt C\ of its r .
,, rc thng wtt . ap1d
Ireland too . , ,. FDJ-oricntcd tnanufactunng and \Cn 1cc-ba\ed ccono
h
d transfomlatwn a:-; a f . . my.
growt an . h .. lati vc failure and une\ o 1ts amb1t1ous high-t h
. . fi ctmg upon t e tc ec _
e\ JJJe '" re e . t the 11 fth Kondraticv or long wa \ e to transform its lo
1
. , nd connectwn o ca
led \trategy a t pech. seeking to ccn1ent and embed the inct
1

1 e ional dcvelopmcn proL . . .
and I g .
1
b ' It upon locah"-at 1on. addmg value and upgradmg tradition
1
ndustnal rene\\ a , Ul a
nou".' .
1
t its local and regtonal development futures.
tivttJCS. now tntcgra o . . I . }
ac . . f , ment and oovcmance \Vere cntica tn eac 1 local and regional
o go\ em b . .
. . ,.. The continued fragmentation and of Its local and
development expenence. .
. . . . ean rorth East England has struggled to address tts pliQht
rcmonaJ m . . . "'
... . . ad1iustment strategy 1S tnfluenced by the complexttres of coordina-
Ontano s economtc 'J .
. d t in the 1nuJtiJevel federal system tn Canada and the context of
tJOn an JOin '' & . . .
: bet\veen North An1erican region-states. SJ It con Valley has ht therto rched
competitiOn . . .
upon limited institutional structures bustness-led dynamtsm, although th1s may
change given the magnitude of its sustainable South Korea's
developmental state has re-emerged with the tntenti on of rebalanctng the national
economy and closing regional disparities. and local and regional institutions in Busan
and other regions are seeking to gain from extensive decentrali sation. Ireland's innov-
ative national social partnership is pivotal in its national growth coalition but it faces
serious challenges to address growing social and spatial inequal ity. Seville's experience
reveals that the alignment of city. regional and national interests in transformation
projects does not necessarily result in substantive local and regional develop1nent. Jahsco
emphasises the potential of strong regional government in constructing an appro-
priate, context-sensitive local and regional development strategy as \Vc11 as leading on
its implementation.
Interventions and policies in the case studies connected directly with indigenous and
exogenous approaches. North East England continued to suffer from the branch plant
economy entrenched by its historical emphasis on exogenous approaches in manufac
turing and services. Ontario remained vulnerable to external control and foreign-owncr-
especially in the context of NAFT A yet sought to gro\v and build its strong
mdgenous strengths to support the learning region strategy. Silicon VaiJey historically
needed littJe policy intervention to support its innovative and dynamic net\vorks beyond
the fedeml university and defence expenditure that supported its development. The
growth of labour market intenncdiarics and other institutions to address the Valle) s
sustitinability quesfo s . 1 .. ,
1
I . h hith 1
n may 1er cl c a turn to a greater degree of 1 ntcrvcntton t an
erto. Busan attemr)t' 1 t . . rd. tment
. mg o remvtgorate tts md1genous assets and promote a
Wtth the help of st
0
, . 1 , . . . f blic
. . . r nger oca
1
and reg1onal policy and the deccntrallsauon pu
mstJtutJons. I reJand . . . d nect
rernams cxphcttly consctous of the need to balance an con
exogenous and indigen .... I . . . Jusi\e
ous approac lCS tn tnanufacturing and services tn rnorc me
N D REG I 0 N A L DE VEL 0 p MEN T t N p R A C 1 ICE
. ys to sustain its local and regional development traJectory S .
11
. .
"''l . . evt e s transfonnatton
.. 1tcgv sought both Jndtgcnous and exogenous growth vet ultJ'm t
1
.
1
d .
s t ' J a e Y 'at e to del1 ver
Ustainable local and regtonal development. Jalisco prioritised ind
0
d
1 . . . 1t::enous eve opment
h
1lc cxcrcistng greater selectton and targeting in its approach to
w . exogenous resources.
The cases central elements of the frameworks of under tanding in this
book: the context-specific, path-dependent and IocaHy and regionally sensitive nature of
development trajectories and the role of policy. While subject to generalised quantita-
uve the character and susta\nabil ity of success' and 'failure' in devel-
opment arc often by localities and regi ons. Ongoing adj ust ment and the search
for 5ustainable local and regional devclopn1ent preoccupies the instit utions of go\ em-
ment and governance in each of our case Local and regional development in
practi ce' has provided an integrated and critical analysis of the experiences of the inter-
national case The Conclusions that follow offer an opportunity to draw together
the main thernes of the book and to reflect upon their significance for local and regional
de\ clopment.
Further reading
For each or our case studies see the following:
h E E I d
. Hudson R ( t989) JVrecking a Region London: Pion: Robinson, F.
.Vorl ast ng an . . .. "' "' . , , J (100?)
(2002) 'The East: a journey through time_. C ay.6(3): .>
1
- -
'Th , 1 tt'on of Enol ish regional governance , Regwnal Studte.\ 36(7). 7 .... I 73
c C\ o u o ..... t t Toronto a
. h T J (?00 l) ontario as a 1 !orth Amencan regiOn-s a e,
Ontarzo: Courc .... . , ... , n e in A.J. Scot1 ( ed. ) Global City-
global city-region: respondmg_ to the_NAfo Press: Wolfe. D.A. (2002)
Regions: Trends, Theoly, Polrcy. Oxford. . l . . Ontarl'o' in M S Gertler and
. . . , , I r and soc1al eammg m
"\egottatmg order. po actes . I l . . . Jn c;tiwtional Adaptation in an Era of
D.A. Wolfe (eds) fnno,atton and Socw ..ewmMng. :11 . n'olfe D A. and Gertler. M.
8
t ke Palgrave acmt an, '
Technological Change. asmgs
0
. . in Ontario: from industrial heartland to
(200 1) 'Globali zation and cconomtc . _
92
learning region?', European Planning StudieS 9(5)E. _575- ) . . F/erible Labor A1arkets in
2
u /.. n the New conomv. . ' ll .
Silicon Valley: Benner. C. (200 ) Ol I D (?00 Lessons from Silicon \ a e}.
Silicon Valley. Malden, (cd.) Global Cio-Region:; . Oxford:
go\'emance in a global . tn A. Regional Advantage:
Oxford University Press; Saxentan. A. ? mbridgr. MA: Harvard Um\ erstt)
. st u !lev and Route /_b. Ca
Competition m 1 Leon .-
H
. , (2nd edn). C\ \
. .
1
Swr A 1\fodern tstor; . . ,
Bus an: Cumings. B. (2005) s and regional development
York: Lee. S. (2004) JQ? Shin 0-f-J. (2000) Go,emmg Pusan.
the 1990s'. Korea Journal 5pnng. 75- c; s illovcrs of extended rnctropol
. proach to managtno P
conflicts: the planmng ap .
1
)2 507- 518.
1
. rger econotn) '.
1 d Planmng
1
. 1 tl c ce t1c J
Korea . EtH'Jronmen an . , 1 partm.:rshtp anc
1
L don PalgraH
, (2004) Ireland: socw , . /' o; \ow? on .
he/and: 0 DonnelL R. rUI . (ll"e NatTOIIOI Cap!la /Sill. I l. alt'zation U1fonna-
cl . fi ( d ) rt rU!f e I
1
, tc' r OL) ' ' J
in J Perraton and B.
1
t e
1
fl ,
1
blc dc\elopmcnta :- d e.- -
7
J93
. (2000) T lC ex !R(') I" ' J
0 Riam, S. . . T. cr ' Politics und k Planninf!. 3( ).
. h oloay and the C dttc tg '. . , I ol ic)' . J:.uropean ,
tiOn tee n o . . n
1
rish
1
ndu!) tna P
( 1995) . Recent de,clopmcnts I
99- 113.
INT(GRATED APPROACHES
-
-
\ J
.
1
l fl lll p ( 199-n J(chnopole' of rhe J florid: 'f'lu \ 1 '.
) . 'II,. C1stdb. ,ll u '
0
"111!-: t 1
t''
1
t
1
.
1
c Jlllf'leH'' London Routkdgc: \ ;.llqllL'/ BarquLro. \ ("'()()) " ..0 -1,
1
(en run lm II''' w c . . . I . . . ') l:.nJ
.
1
, r \etworkms.:. /JtflO\ arum. ll\flllltlml' and (lilt'' l 011 i t
noll' De' t' opmut , l on and ' '
1\ C\\
1 Routledge. ? _ .
. G.
1
.. F Pictrohclh. C. and RabdloHI. R. (-Ot))) Upgt,Hhn).!. jp ll. l
Ja/JHO. tlll,tnl. .. . .... ' g 0'\' ll '' I
.
1
on from L 'llln \rncncan dusters . II orld Dn clopment ,, 4) : ' lll
chams: ' . . , . , . . , . . . . ' : \ .
R
1
. ,
11
tt. R ( 1999) RccO\Ct") ot ,1 \k\.t<.: tlll .tlu.Hmn bonani' l 3,
aot: o ' . I -71 l '\ "- ' ot Cl)llc,
dlicicncy'' . Ill >1M Del'llop111<'11t 2
7
( 9): :- - c "' e
CONCLUSIONS
Introduction
The grO\\ ing extent. and importance of local and regional development has provided the
central focus for thts book. \Ve ha\e sought to provide an accesst.bl t l d . . e, en tea an mte-
grated of contemporary local and regional de\ elopment theory. mstitution
and polt ey. Part l tntroduced our initial starting points in considering local and r\.:gional
development. Chapter 1 detailed the grO\\ ing importance and significance of local and
regional devcloptnent for nationaL regional and local institutions of government and
governance internationally in recent years. The challenging context of local and regional
development was outlined encompassing a more complex. kno,dedge-intcnsive and
'globalised' eapitalistn marked by rapid economic. social. political and cultural change.
territorial competition and concerns about future economic. social and ecological
sustainability. The need for alternative local and regional de\elopment strategies was
outlined in the context of the changing institutions of go,emment and go,emance and
the evolution of public policy in ten cntions from top-down. national and centralised
approaches towards bottom-up. local and rcgwnal and decentraliscd and integrated
fonns. Geographical disparities and inequalities in prosperity and well-being frame ques-
tions about the ai1ns, purpose and ocial justice of local and regional de' elopmcnt.
Chapter 2 focused upon the fundamental questions of what local and regional de,d-
opmcnt is. what it is for and, in normati ve terms, what it should be. The definition of
local and regional development explored its meanings. historical e\olution and geogra-
phies of space, place, territory and scale. Local and regional development has recently
. . . t 1 pollucal and
broadened to encompass economtc and socwl as ,,ell as en\ uonmen a
. . . . . f
1
d . 1 d ,,elopmcnt is now para-
cultural dtmcns10ns. The sustamabtllty o loca an 'cg10na c .
. . II d d in the cmltC\. t of Justor-
mount . Local and reoional development ts socta Y ctermtnc .
. . o . .
1
I , b t\ .. en places and over umc.
tcally cndunno themes, pnnctples and values t 1at "ar) e "c . , 1
o . t: d' . ns oflocal and rcl!tlmal de' e -
The varieties. objects. subjects and soctal we hare tmcnsto ... d
1
, ,
, 1 di tributions of " ho an w l<.:ft
optnent often have sociall y and gcographtcally unc\ en s
. , f 1 1 d eoional de' clopmcnt.
benefits or loses from particular forms
0
oca an
1
o d . at <J ,,
d
d
. o local an rcgton t.: ..... t
Part II established the frameworks for un erstan tn.=- .. _
11
tH:o-
'J d emergent
Chapter 3 reviewed each of the matn extsttng an h (tag, cvdc and "a' c
. . . f 1 1 tempora I c angc :> c.: .. .
Keynestan: theones o stnJctura anc . . h cs) institutionaltsl11 .uuJ
. 1 y transttton t con
theories; Marxist and radtcal pohttca econom ,
CONCLUSIONS
. ,
1
ttnd karning: l:\tcnJcd nt:o l'lassictl tl .
. . . inno\ ;tltOil. rdllH\ t :: ' 1t:on 's
, , nrtJ)htntl cronomtc'. C<Hnpl'tltl\ L' d<h ,t ntagl' and I
(l . )\\ rh thcon. !:-U)e I c Us-
c
1
t t nd J)tht de' J ht: dhcu"sion of 'l\tcl
. 1'tbk de' doprncn ,t ' l . et
rcr,). -.,u-.,f,liT' . . tin,, potnb. a'pn,ltwn' ,md I
. f . . d upon thcu -..t,1r eo re a-
ot tdca.., , .
1
.
111
..,11l.., dtHI pnlCC..,...,L . ...,, thctr rl'lattoth tt, poltl \ 'llld t' .
. l" lU al mt:t: 1d . ' IlCtr
rJOn!\h
1
P" ' :- d, . t tnd tnd cxplatn lt)c,ll and rL'gtonal de\ clopnll'llt a ...
I
. . r )rls tn to un t.:l". ' cross
1
n11ta tl - .
1
1'lcc and O\ er tunc. . .
:--p.n:c.
111
r ' . . ..
1
the Jnc' ttabh incd bet\\ ccn institution , t'
Clnptcr 4 . s n
' , . d o \ crnancc and local and rc:gtotwl de\ clortncnt. r he chapter
"0' cmmt: nt dO oo . i . f
c t r, of the "1(1tc but L'Otlttnucc nnpot1ancc o go\ crnmcnt in ll
dwngmg na u t . . . . 1e
. l 'nc, of the broudt:t tn'tttuttonal ot go\ crnance ne
contC\l of tt1C emcrgc.: c.: . . . ... ' w
.
1
, . d th .. crcttlOn or .... tn:ngthcnmg of the capactttes of local and regional
rcl!IOila 1 m ,tn c.: < ..... .
..
1
t tt.tutton' It aho noted the c:ndunng tnftuencc of the dtsttncti ve histor
de' c opmcn m . . . . .
.
1
. _ .
1
ronal Jcoactc of pantcular nauonal vancttcs of cap1taltsn1 that shape the
JCH ll 1 ' o .
-;pecitk compromi c, and ") between grO\\ coheston and sustair.lability that
influence local and reg10nal development. focused upon the mcrcasingly
multilc\cl S) stem of go' cmmcnt and across a range of geographical scales
for locaJ and regjonal de\ dopment and the gro\ving itnportance and involvement of ci \jJ
socict). inno\ ation and C\pcrimcntation in democrat ising and encouraging participation
in institutional and political tructures Lnderstanding the institutions of government and
governance ts \ ital in framing the rclattvc autonomy and degree of agency localittes and
region been able to cxcrct\C in reshaping existing and developing new approaches
for local and regional development.
Drawing upon the emergent context. of definitions. principles and values
and frameworks of understanding. Part Ill addressed interventions and thetr instruments
and polictes of local and regional developn1ent. Themes revie\ved cornprised approaches
seekmg to hame both internal or indigenous and external or exogenous resources and
forms of growth and de\ elopment. the growing importance of context-sensitive rather
than universal polic} and the significance of policy learning and adaptation rather than
policy transfer. Chapter 5 reviewed the tools a1med at mobil ising local and regional
potential and promoting indigenous and endogenous developn1ent within
locahttcs and rego 8 .,d.
.
1
ns. ut mg upon the botton1-up approach di scussed in the tntro-
ductiOn the chapte d + 1 d l
' . r e t 1c mstruments de\ eloped within programmes supportmg
the estabhshment of n b d' J
C\\ usmesses. the growth of existing businesses and upgra mg
and developinn labou Cl
6
d t
o r. lapter tscussed approaches to understanding mobtlc 10\C *
mcnt and the wavs in wh 1 1 1 d
. " tc
1
oca and reg tonal institutions have atten1pted to attract an
embed tt to promote l . l d . k' u
. octt an regtonal development. Institutions and policies see tne
to attJ act and embed inte . 1 . to
ind o matlOna firms. encourage reinvest1nent and form ltnkages
1
oCnous development t ., . nd
retainin' s . .s t dtegtcs and dealtng with di vcsttnent. and attracttng a
g . pcclflc occupattons, were reviewed
Part l V to pull the t , . , . . . J a ted
approaches Cl , . . . ndtn themes of the book together and constdcr mtcgr
laptcr 7 utthscd th" .
1
. d inter-
ventions outlined
1
e tndtn t 1en1cs. fratneworks of understandtng an
. ln t 1c book to an 1 , I loprncnt
tn an explicitlv t . . tl <.:asc studi es of local and regional (eve
. m Cl national <.:ont .
1
. . .. froJll
ext t rawmg upon different places and tcrntoncs
-==
CONCLUSIONS
bast Asi", Europe, Central Amcri<.:a and Nort h Americ Th,. , . .
. . . . '
1
e Cdses compnsed 1 orth
East England. UK. OntaiJo. Canada: Stlt<.:on Valley USA
13
, S
. . . .. ' .. usan. outh Korea Ireland
Seville, Spatn; and Jalt\CO, Mcx1co. [or each <.:ase the a ,
1
.
1
' '
. . . . . . na ys1s exp ored the common
tnd partt<.:ular pnnc1ples, values and explanations fJ ..
1
l .
l o oca an, rcgtonal
OJ)tncnt. dcvelop1nent and poltcy approtchcs Hv
1
f
< "' ro c o government and
governance, thctr degree of and f uturc issues Our analys'ts en ,
0
h r.
. 1 P1astse t e 01 ten
locally and reg10nally sensitive nature of develop-
ment traJectoncs and the role of poltcy learning in shaping institutional interventi on for
local and regional devcl opn1cnt. Rather than definitive and simplbtic stories of 'suc<.:ess'
or 'fai I urc', the case studies suggest local and regional development is a question of the
extent and nature of adjustment to both external and internal stimuli and constraints that
evolve and change over time in parttcular localities and regions. Institutions of govern-
tnent and governance and social agency in localities and regions arc critical in shaping
the local and regional development trajectories of particular places.
This chapter has sutnmarised the content of the book thus far. Y ct. having reached
point, we are acutely aware that we have not speJled out our version of what kind
of local and regional dcvelopn1ent and for whom. Such a di scussion is imperati ve. as
Glasn1eicr reminds us:
in the absence of d1scussion on the goals and purposes of economic develop-
ment policy, we wil l remain in a period of policy formulation which favours
interventions targeted toward either reducing the costs of doing business or
itnproving the competency of firms. Such emphases will ensure that thcmy is
invoked to justify current practice. further diverting attention from the deeper
underlyi ng bases of economic deprivation.
2000: 575)
. d th es of local and regional
We seck to draw upon sotne of the current concepts an con .
. . f h t h r c {)rogresst vc
deve1optnent detai led in Chapter 3 to outl ine our vtstOn o w a
0
ts
1

and sustainable local and regional devclopn1ent might look Jike.
Holistic, progressive and sustainable local and
regional development
. . . . . . s 'eoura hi es. \ aricties.
Butldtng upon the dtscusston about defintttOn. g o p . .. . >f holistic,
. . Ch ? here we outhnc our \ crsron c
values and distributional quest1ons lf1 aptcr - d -. fi rion of cJevel-
d
o 1 development. Our nJ
progressive and sustainable local an reotOna . . .
1
, tcr tht.' n:alisation
f I
'( l S and tnStJtutlOOS t lat OS
opmcnf seeks the establishment o con(
1
wr ' . d p ..
0
pk. conHlHHl-
. . d t' . It . of the human min m c ..
of the potential of the capactttes an acu tes .
1
.d ,cloprncnt' of ll>ealrtH:s
itics and in turn in places (Williams 19
83
).
1
n our view. t C\ d sustainable project.
, ' . .. b lanced cohCSIVC an ( f' .
and regions should be part ot a more a . '
1
. . bct\vecn and within loca tues
. . I d'. 'tics and mcqua Jttes
Reducing the soctal and spatta tspan . mcnt'
h
. d standing of develop .
and regions is integral to t ts un er
256 :
- - - -
CONCLUSIONS
The holistic dimension
A 'holt tiC approach sec cJo\C relations bet." ct:n the cconon1ic. soc1al, political, ecolog-
ical and cultural dimensions of local and rt:gJOnal de\ cloprnent (Beer eta/. 2003: Perruth
2004
). The traditional priorit) of .. fhmg the cconon1) .. as a prelude to, and ds a
form for ecuring social \\ cJJ-being ( \ torgan 2004: 883) is challenged. the
hol i tic approach eek. to promote better U\\ and balanced integration bct\\cen
the economic. social. pol iticaL ecological and cultural facets whi le acknowledging that
tradc-offs and conflict may be in\ oh ed (Haughton and Counsell 2004 ). Holistic
thinking connects to the broadened notion of dc\elopmcnt as a \-Vidcr and more rounded
conception of \\ell-being and quaht) of lttc di cu sed in Chapter 2. For Beauregard
( 1993), thi include a connection to the '"' phcrc of social reproduction "' ithin families
and household and. in particular. the gender di\ ision of labour. This broader notion
includes economic concern -;uch a compctiti vene s,, gro\vth and productivity but
is not reducible to them. Indeed. the holi tic approach attempts to mo\ e beyond the
narrO\\ econmni m and 'desiccated indicators (.lvtorgan 2004: 884) like GOP and
income per head to de\elop ne\\ metnc that better capture the broader and n1ore sustain-
able nature of local and regional de\ eloptnent (Bristo\v 2005 Geddes and man
1999). Each of our case study anal} ses suggests local and regional development in prac-
tice wrestles \\ ith exactly these kinds of relationshi ps and dilemmas, for example
ened socio-spatial inequality threatening conti nued local and regional growth in Silicon
Valley and Ireland as \'.ell as Ontario learning region strategy to generate
high \alue-added and environmentally sustainable jobs. Holi stic local and regional
de\ elopment attempts to integrate the concerns of economic efficiency and social welfare
(Perrons 2004 ).
Critics of holistic thinking rna} question the practical feasibiJ ity of such an all-
encompassing approach to local and regional development. Institutions and policies
perhaps cannot attempt to inter\'ene and shape such a wide and complex set of rela-
tionships for the good of localities and regions. The challenge to integrate the concerns
of economic efficiency and social welfare may be formidabl e, particularly when eco-
priorities can dominate local and regional development. Yet, un we begin to
unptck dominant ideas of local and regional development and reveal the relations
between broader notio f 1
ns o cconom1c. soc1al, poltt1caL ecologtcal and cultural de\e op-
ment. balanced, cohesive and sustainable development of local ities and regions
may rcmatn out of our reach.
The progressive dimension
A progressive approach t 1
1
. b f
. . .
0
oca and regtonal development is underpinned by a e
1
e
m the soc1al mjusticc f 1
TJ .
0
uneven development and spatial disparities and mequa tt1C
5
.
1e unfairness of peopl ' . r I h )'
I' I c s
1
e c 1ances and opportunities being shaped by when! t c
tvc and thetr soctal cont . . 1al
d
1
. ext IS mtcgral to th1s principle. Progressive local and rcg
101
eve opmcnt ts potcntiall h 1 mic
.
1
. Y
0
IStlc and recognises the relations between ccono
socJa , ccologtcal politi I d . . . in
rad .. I . . . ca an cultural change. The roots of progresstvtsm ate
tctt cnttques and attem t . . 'aluc
P sat contestmg and managing capitalism, a progresst\ c '
CONCLUSIONS
system and nonnati ve. often social-democratic and Left politics. and the aspiration for
more gco-graphi calJ y even development in and across localities and regions over time
(vtassey 1993; Marquand 2004).
A progressive approach emphasises the role of the state together with other social
in tituti ons within civil society in tackling disad\antage, inequality and poverty in local-
ities and regions. To varying degrees and in different ways. the experience of the case
studies supports this analysis. l n the of a lagging regional economy. "\orth East
England i s struggling with the shi ft away from an interventionist national state while
Busan in South Korea may stand to benefit from an episode of strong and redistribu-
ti ve regional policy in the interests of more balanced national spatial development. \Vhilc
the narrow theoreti cal efficiency of competition and markets in allocating resources JS
recognised, it is explicitly argued, particularly in institutionalist and socio-economic
approaches, that they are not free floating social phenomena but arc underpinned by
frameworks of institutions and conventions (Polanyi 1944 ). As Scott ( 1998: I 02) argues:
'superior levels of long-run economic efficiency and perfonnance are alwa)S
attainabl e where certain fonns of collective order and action are brought mto play
10
combinati on with competition and markets' (see also Amsden 1992: \Vade 2003).
Markets, then, need to be tamed and regulated to ameliorate their tendency
instability and the unequal economic, social and spatial outcomes that may undcnnmc
. d t bJe local and regional development.
aspirations for more balanced, cohes1ve an sus atna .
h
fonns of local and rcg10nal
In oppositi on to a progressive approac are regressiVe . . .
h h
h d ign or default - soc1al lllJUS-
devclopment that may encourage or entrenc - t roug es . .
1
.b
. . . .
1
. The promot1on of economtc 1 er-
ti ce and local and regional dt spanttes and mequa tttes. . . b ....
. d territorial competttton has ccn
ali sati on. state restructunng, welfare re an . .
1
d spatial inequality
. h atmg orowmg socta an
accompani ed by regresstve c anges gencr o b . 1 d or dominated
S.
1 1
, narrow I y us mess- e
(Jessop Peck and Tickell 2002).
1
m
1
ar)' b d. te local and regional
, seek to su or ma
structure of government and go\ emancc ma) . cems of competitiveness.
. . t d the economiC con
development solely to bus mess mteres s an . . ches may wither in such
ft bTt) Jlohsttc approa
growth, innovati on and labour market exl
1 1
. h h concems. Silicon Valley
. studtcs ec o sue
a cold climate. The expenenccs m our case dctions and problems gener-
. I d me of the contra I .
and, to a lesser degree, Sev1ll e, revca e so . . interests arc po\verfuJ
10
. 1 whtch bustness . . I
ated by network forms of governance IT .
1
development. SJmllar Y
. b l d local and regJOna . . ,
pron1oting a particul ar kmd of un a . . d. d alistic and antt-cooperatt\C
. h mgra1ned tn t\l u t
Ontario's experi ence tllustrated ow an . d undennined ex penmen
5
. . t sector mvolvement an , to
business culture worked agatnst pn\ a e , ce considered neccssaf)
. .
5
of aovcrnan , 1
in the more collaborati ve and assoctatl\ c orm o .. , forms of local and rcgtOnci
. . t on system. Rcgress
1
\ e . 1
1
pctition
construct a dynamtc regtonal tnnova
1
1 inter-terntona con
d b th kmds aste u f other
development may be charactense Y c d eloping at the expense
0
of places C\ h arkcts
discussed in Chapter 1 , zero-sum notJOnS , harsh rneritocrac) in whlc
01

d
. f 'development as a . , d places.
places and an understan tng
0
. f le commun1ttes an .
. f the potential o peop . . cd upon a st:t
alone arbitrate the rcahsat10n .
1
dc,,clopmcnt ts focus .
1
1 I nd reoJOna . al
A progressive framework for oc.a I . ond values. These trans-htstonc . lid'lritv
. 1 prmctp es a ohcston. so '
of foundati onal, even unt vcrsa ' . ..
1
ty democracy. untt) c d . cl C\ oln.:
c. equality b forge un
might include just1 ce, 1a1rncss,
1
have often cen
. 1996) Such va ues
and internat ionaltsm (Harvey
.
: 257
'
CONCLUSIONS
-
. 1 the proare siYe and broader political atnbition of \\hat Pavn
O\ er tJmc throug11 b . . . , lond
.. .
11
d . .
1
, tant particulari tn - the tdeas and pnnctplc. that can connect
1
).
1 \\ tlllams ca e mt . l ca .
.
1
t ggles together in a n1orc general. gcographtcall) cncon1passtng c
0111111
parttcu ar. ru.___. . . . , on
I d
. t t (Har\'C)' ?000) The spcctfic forn1 and at1Iculatton ot such prin{tpl
and 1arc m ere - . '" cs
and , alue arc subject to a greater or lesser degree of and .rcgtonal
. . hapt.ng and truoole ,, ithin their particular nattonal and tntcn1,ltional contevt
mmatiOn, ' c oo . ' s.
As our Ontario case tudy dcn1on tratcd, for cxmnple, the parttcular Canadi an nattonal
ocial ettlement i bound up within the confederation of it pro\ incc . With compara-
ti\ ely weak local and regional in titution".' orth England has struggl ed to adapt
in it marginal position \\ ith the L
1
nited Ktngdotn nat tonal polt ttcal economy. Ireland's
innovative national social partner hip contributed to ustaining it rapid economi c
growth in the 1990 .
Uni \ er ali t value arc not in1pl) fi \.ed in tone, however. either are they
the product of relati,i t definition of de\ eloptnent' determined by patticul ar places
in specific time period . Such i alated and parochial understandi ngs may only fuel inter-
territorial competition and zero- un1 interpretations of the developtnent of some pl aces
at the expen c of others. ln tead. the local and regional articulation and detennination
of principle and value are nonnath e i ues that are subject to dcn1ocratic di alogue.
evolution and political choices. They are questions for localities and regions of what
their local and regional dc\clopment hould be about. Keating et a!. (2003) argue that
tc1Titorial identitie can become instnm1ental ised and utilised by political and social
agent and can proYide a ocially rooted frarne\vork for politics. 1n their view, formalised
institution of go\ ernment and go' emance in the state and civil society adapt and mould
uch interests. Drawing upon their particular interpretation of the concepts and theories
discussed in Chapter 3. localities and regions then find or reach their own 'syntheses
of distincti\ e 1nodels of local and regional development - for example grO\vth, social
solidarity, sustainable deYelopment - conditioned by cultural values, institutions and
prevailing modes of social and political n1obilisation. Yet, while reflecting the partic-
and specific aspirations, needs and traits of localities and regions, such locally and
regiOnally detennined models should not be developed independently of the more funda-
and universal values outlined above. Moreover, such local and regional resolu-
tions are shaped by the balance, dialogue, power and relations of local
and regiOnal mterests and their context and mediated through institutions of government
and governance.
The notion of broadly based principles and values can help fran1e the extent and
nature of local and r l d . I
egtOna e' clopment trrespective of the relative levels of de\ e op-
ment of specific t .
. . coun lles, regtons and localities (Standi ng 1999 ). Thi s last potnt IS
ct uctal to the understa d f . d I
n mg
0
locally and regtonally detennined and appropnatc e' c
opment for localities a d . . . , al
. . n regJOns. A progresstve vte\v is that there are basic or UOJ\ cr!)
pnnctplcs that matter in has
, . . especttve of the levels of wealth and income. Contro' ersy
accompanted thts issue 1 . . . ,ed
d. ,
1
, '
10
wevet' as developmg countries have some tunes portra)
C\ c oped world concern tl ela-
t'
1
. Wl
1
envtrontnental awareness and labour standards as r
IVe uxunes and closet . t ci al
ne d . d . pio ccttonlsm they cannot yet consider due to pressmg
50
c .;; an a destre to orow d h' . . . . . d Dietz
2004) A . . b an en ancc thctr own ltvtng standards (Cyphet an
s we saw m
0
d. . d a of
ur lscusston of post-dcveloptnent in Chapter 3, the
1
e
-
CONCLUSIONS
universal progressive values has been criticised as cncourao
1
ng a E d
( b ..... urocentnc an
modernist 'one-best-way' of 'development' overly reliant on the national state and tried
and tested in the industrialised North. We reject a monolithic. ' onc-si;e-fits-all' local
and regional development. We envisage localities and regions constructing their own
context-sensitive tnodels but with reference to more universal principles and values.
The sustainable dimension
SustainabiJi ty is the third guiding principle for our holistic and progressive version of
local and regional development. Drawing upon the discussion in Chapter 3. our mter-
pretation of sustainable development is holistic in understanding
4
development' as a
broader idea of health, well-being and quality of life in localities and regions. It incor-
porates an understanding of the relations between the economic. social. ecological. polit-
ical and cul tural dimensions of sustainability. Such an approach encourages a closer
look at whether particular forms of economic growth might be socially and ecologically
damaging, even though they may offer short-term jobs and investment. Sustainabilit} is
progressive in priotitising the values and principles of equity and long-term thinking in
access to and use of resources vvithin and between current and future generations.
As Chapter 1 illustrated, previous fonns of local and regional development have often
been criticised as too short-term in their focus, design and delivery. Local and regional
development in particular pJaces can often be fleeting and based upon the fortuitous
combination of circumstances that work together in a virtuous way for specd1c periods
of time. Y ct, the socio-spatial inequalities in Silicon Valley and Ireland raise issues of
sustai nability as such configurations can just as quickly unraYcl as distinctive advan-
tages are not renewed or eroded by competition or cultures. institutions and
d 1 t n Quick fixes have somet1mes
cnabltng adaptati on, tnnovatton an eammg arc ou grO\\ . , . . 'a
been sought for problems with deep historical roots such as Sevtlle s ambJtJous
' f d 1 t h ' often pro\ cd short-lived. pubhc
to create a 'technoc1ty . Fonns o eve opmen a\ e .
.
1
11 ctum A sustamablc approach
tnoncy has been spent and endunng prob ems typtca Y r .
. . I d ion a I development. E ' tdence
seeks lastino and more res1l tent forms of loca an reg r th
o . , . .t , nd stability, and may IO:,ter e
suggests long-tctm strategies pron1otc conttnuJ Y a
condi tions for sustainable local and regional r e C'onnectinc'
. . d
1
ment 1s context-scnst J\
Ftnally, our approach to sustamable eve op . . ceks to
. . . . . d . Chapter 5, thts vJeW s
\Vtth the tndt gcnous approaches dtscusse
10
d social to
1 th local assets an
distinctive structural problems, dovetat WI h e more likely to taJ..c root
. I development t at ar
encourage the kinds of local and reg10na . h 1958 Storpcr 1997).
. lutions (H trsc man ,
and succeed as locally and regtonaJiy grO\\I1 . . t. ns of v
0
,cmmcnt and
. . . 4. nal sis of the msutu 10 ::; ,
Dcvcloptng our tdeas from Chapter s a Y
1
f the state as one - ,1mong
( n of the ro e o . 1
governance, thi s connects to the recognl
10
. d ,der ci' il of t lC
. f l b . capttaJ an \\' . . . . f
others including the soctal pattners
0
a out . tic and systcmtc torms
0
holistiC programma
leading agents of development and more '
local and regional poJj cy:
. rtnnt role for the
. , nt implies a more Jmpo { . . I
cnviromnentalJy sustainable dcvelopmc . I -tcnn -
. T equ1rcs a ong
public sector, because sustaJilabt tty r
.
260 :
- ' -
and holi ric per pective, taki ng into account the full benefits and costs to soc1 'tv
and the environment. not only the po. sibilit) of private profitabilit) . "'
(Geddes and , C\\ tnan 1999: 22: also
Aufl1auscr et a!. 2003)
Depending upon the circum .. tanccs and a .. pi rations of particular and 1 cgions,
balances and con1pron1i c \\ill no doubt ctnergc fron1 con .. iderations of sustainable
development when connected to the holistic and progressive principles.
Holistic, progressive and sustainable local and
regional development in practice
Far from an infea ible "ish list. the principle and values of holi tic, progressi\ e and
u tainable local and regional de\ cloprnent arc being explored and put into practice by
internationaL national. regional and local intere t . The International Labour Organisa-
tion' frame\\'ork focu e upon local de\ elopn1ent as the focus for hun1an development
and their conception of decent \\ ork . Figure 8.1 describes the relations in this partic-
ular model. Son1e exan1ple - atnong tnany others - include sustaining local and regional
economic (Exan1ple 8.1 ), international fair trade and local development (Example 8.2),
locali ing the food chain through creati \ e pub] ic procuren1ent (Example 8.3) and encour-
aging local de\ eJopment through 'demanufacturing' and recycling (Example 8.4).
LOCAL
LED successful processes are baSed on
vast particopatJOn of the local pooplo and
ther representat>es an ol.1botahng and
unolementng the strategiE!S. fndll'l9
LEOfll3lnmiS the wc!l-being o! trle -- DEVELOPMENT
Socl31 and and lhe olllle
-- appropnate responses to their speohc
and needs and unique condhons
enwonmental QUXavot the temety
protect on
favoured by
harmonisatiOn
Respect for
labour rights, and
decent labour
11'\arl(et made
P<>Ssible by the
focus on human
resources
Harmonsaton of social
and economic po 1C1es Participation
Access
HUMAN
DEVELOPMENT
Opportunities
LED enables the local
potentalltres, rendefll'lg ava!lable ne-...
.....________ opPQ11un.tles lOt and empiOYmCfll.
LED mOte successful ltllllatiVes are based
on of SMMEs. exploiMg tile
DECENT WORK
chains ollocal economiC vnlueS.
Local staJ<.ehOiders create an environment
enabling St.1MEs to start and grow io a
SU$taroble way, gener.Jt&ng n s)'$temiC
comoettrveness
-._ Social dalogue rs
enabled by
PfOXIffilty and
common Interest
of local actors
Decent JObS are
created oy
favournb!e
enwonment and
shared ams
Figure 8.1 The ILO framework
Development,
for Work, Human
d Local
Development an
Source Ada t d f
. P e rom Canzanelli (2001)
Example 8.1 Sustaining local and regional economies
The viability and sustainability of local and regional economies has received growing atten-
.
tion in recent years (Ptke eta/. 2006). In the context of the potentially 'delocalising' and
damaging effects of globalisation, the preservation and promotion of local and reoional
t:l
economi c linkages and circuits of value have come to the fore (Hines 2000). Drawing
....
upon the concepts and theories in Chapter 3, Pike et a!. (2006) have identified economic
growth, economi c income, investment and economic assets) people, employment
economic structure, economic roles and functions, innovation, learning and technological
change, place-based factors and go" emtncnt and go\ ernance as the detenninants of local
economic viabi I i ty and self-containment. Each can operate to support or undem1ine eco-
nomic \' iability and self-containment across a variety of spatial scales and time periods.
In the United Kingdon1, the localisation agenda has prompted the Economics
Foundat ion (2002) to develop a practical fratnC\\ ork for use b} local and regional institu-
ti ons analysing and encouraging the recirculation of local spending within local economies.
It argues that the leakage of local spending power outside the local economy. for example
to supermarket and food takeaways, undermines local economic \ itality. Drawing on a
implificd version of the ideas of Keynesian discussed in Chapter 3. their
'Plugging the Leaky Bucket' fratnework reveals that for every 100 that enters the local
economy, if 80 per cent of each 1 spent stays in the local economy. the total amount of
spending that the initial 100 wiJI generate is about 500 - a multiplier of 5 00). If
onl y 20 per cent of each 1 pent stays in the local economy. the total IS
a multipl icr of onl y 1.25 ( 125/ 1 00). Maximising the amount of local that
h nomic viabthty and sustam-
late locall y prevents financial leakage and pr01notes t e ceo
abi I ity of local economies. . . , f.1 etown
I
[i Local Selt-Re!Jance s "lom
Simi larl y, in the United States. the nstttute or . _1 ,
1
I
I . I. sat ion of ownership anu ret at
Advantage initiative has sought to encourage t
1
e oca
1
.
1
.,
1
.
1
.;;;; . I ... l hnkatres and unpact on t 1C oca
spendi ng among local businesses due to thetr greater oca o . fi
f h omic nnpact of ten HlTIS In
economy (Mitchell 2000). A con1parativc stud)'
0
t e econ fi , . , $100 spent
. . t'torsrc\caledthat orc\er)
Andersonville, lllinois, with the1r cham store compe
1
. . db. $100 spent
in a local fi rm $68 remains in the Chicago cconon1y only $
4
3
15
retatne
1
' ?004) Stacy \1 itchcll argues:
m a chain store (Civic Econon11CS - '
. . . trees are broadly O\\ ned and
local Ov\ ncrshtp ensures that economiC
1
esot . . tt'ons arc reqUired
. . 1 1 \Vhtle larue corpora
controll ed. It keeps dectston-maklllg oca
11
.... "d can be
. . h h Jders. Joe a ) O\\ nt:
by law to maxm11se returns to s arc
0
. d b .. se arc o\\ ned b)
. l b ttotn !JOe An ccau
guided by other values bestdcs t le
0
c, cater concern about
. tl tend to have a Jar gr
who li ve in the comn1umty.
1
e} .
1
. ,
. - m health and \ tta tt). . ?)
the cotn mun 1ty 's welfare and long tel ('vi itchell 2002 -
. . .. a retail unit w
. . . . vc lc ,.islatron on lrmtttno
Such tntttatt ves have encouraged supportl . g c . l" rest
1
urants.
d
'enttng t OJ mu u '
constrain
4
bi g box' retai l stores an pre'
- - - . -
\ l t t } .,
'\\ t \ l \\Hill 't" 1\ \\\\\\ lh \l I I 'H,
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1
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th \t l IU '" h \ sll '1 'h \,1 , 'llll\\\l1hh tlh' \\ \\t l,t lh t 'h1 'II ,l l'lh'.'
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\ dh l'"''hh lh'l' m I tlh' 11t lltt h 1\.1 I I lt lh' '""'"
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' II \11\l l\l .h t\1'\ , I\\"'"' tlHtl hH\ ,q \ .\1\h' h,,,,, \'1\
)lh
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dU,\ I:'\ .\lid I lll\,\1\tl 't I II ' l I
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1\hUH , ,,,,,,1\lh' \t\ t s , . , If ,. l I
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'"' U\hhtl,,,,, ,,, \ 111pl,,, \ II 'I I( l ' I I I '
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IS '\ ,, 1'1 h'' ''"' 1\hl' '' " . " I I
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I I ' '' Ill\ ,, ,, ,, I\ "'' tl I I I
lh u . I I ' " \\ \ 1\lltllHhlll\ '" '"' hl l'"''ht\' ' t . II\ til,' ''""' \" '"
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IH.I\IIH I I I \ . ' ' h' ''' "t"'" h ' Ill tlh' I lit " ' ,,, ,,,h,\, 'tq htt\' '" '
" " lhll thl l '" ttud ' I I ' I
lu,ll 111d I\
11
'
1
\' 'H'' 'I'h tlh '''1\1\\h' d\\llh q.U\tlllhl ,AII H
" '
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tl,\ ',. , d"IHih' llt \ I \d
' U\Ihll\11\ ' lll\1 I l dl\1\1\l S\llllh s,,,., "
' ' u 1\ s 111 \ l '
Ill I' ll 11\11 H \ I dll\\1 \ttlh' ,Hhh b\ ,,, \11\ I ' Ill It'" . Ill ''I'''" ,I ., ;' 'P"' '"
' ( '"'"'' I I\ \lh! lh' 1\h I I l) II
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1
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k\ , \ ,11\\\ h ' \\\
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1
1 ,,, .. I\\'
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lHtt' ,th 1 , dh '" ,, 'l H \ uu\'l' 'UU l '" php '1\l ''h'
l', 'Pl l' , ""' ptl, \ ,, "'', '" \ ' \l
Plate 8.1 facir trade: wonum .entrepreneur and local Tunarl brand of jeans at a
ra e ralf n ochabnmba. Bolwia
Source: Photo ,raph b\' Nina Laune
Example 8.3 Localising the food chain through creative
public procurement
Thl' intcrmttinnal Stt\.'h:hint! (lf C{lJl i. I r. '
8 rt n t . . ... . lllhlltt: and g i'O\VII\
0
l'Ol1l'l..' l'tl S :IIH)ll{ food quuill\
JH lt\ . I or
1
. . . t-- . .
and
1
,gion
11 1
. .
1
.
111 1 0
'
1
mg t h ,. f nod dwn 111 t h 1111 st s of lora I
, ll:\ l (\pnu:nt. lonsuntc-rs t 'tl(l t I . . .
,, ' ltl ' t hm t
1
t: l) P .lu: 111 produtts that d1splay
, ' L hl pan.. making thl' "l' > lJ'' I . I . " l . . l
ampon mt .
1
t . .
1
o l g ,tp llcl pnn l'nancl' lll JotH mcrcnsmg )'
. \:: ' l fi.ll'Us , t t I I . l
int <:'l!rit) \,f the J'H
11
... ,
1
. l.:l nn rn llf school in about t lC
') ll. Ill and the hr . I , , l . . .
.1blc elupm ,
111
\ f . n.ll ctln 111s n I h.: a It h. 11 d 1-11<.'111' and susuun
\;; J \lll sdtool n I . . o . I
lllmc nuuitious r
1 1
.,.
1
may pnn 11k a multipk dilllkll d' , first, \1'11
1
d
. . \ Ol u u d i c t-r + t i I I I . ... .
l.lbCk:\). I t II "ta ll'a t l prnbknt s (L' . l]. . hl.:att dtsCU!'l,
f , y l I .. . I
unnt!rs and produ\:l'rs TJ . .
00
lllca s l'ould Ill:\\ h' l'al nwrkets itlt' hll'll
b I
. lll d. a more lo .. ,, . 1 t'
1
t"l
lts through r, 1 1'1:1 no1 l'11a Ill dd i 1 ers poll' nt hI t' II I'II'OlliHCil "
the 'fool ' l \ r.,..tl
to fork. t llll ..:s ur dtstanlc by fnnll
11
l l
l'renti\c pt tr
('. I' l\: in I U . . . . .
JCilll<lll) . ltal} and Slled. ' mdutling. Austria. I k:IIII Hirk, rranc< .
en. hds played .., 1 ,,
1
. .
t:.ll mg rok tn prolll\ltinu llhHl' s
'
CONCLUSIONS
tin\!S tU!'fllli C, fmld in publ ic faci lities inc\ ,.
\H mg schools Wl 'l
nHall:t l' rs p111' Citns111g guods and services fur puhl'. \ .' . . ll c UK public procurement
. . . lc )Odtcs cite 14 u \' .
l
)rl!vvnl d1 s ' l'lllllllHttoll tn tavnur of local SUI)
1
.. . . that k t
. . ., p ICI S Wt\htll the S' c 0
,, ,
111
p..:l1 t 11111 ru nt h\J r U M C111hcr St atcs .
1
. , . . lllt;lc Market's
. . . . ' 'c I.;I vel y mtc ..
are l y spt:etl ytng t>r l \ t . . rprchng sucll regulations
. . . . c ll lll qual Illes frcsl . .. .
rcg.tnnall y eetl II ted ptnduct:s all d organic in\Jt )
1
. , . . l SCdsonal produce
e \:< tents to unpl \ '
in ill I hut nanlc. In Ferrnm, lt aly for ex( l
1 8
) cmcnt ocnl purchasinu
. . ' .u 'P e. ( per c0nt lf II " .b
the: l.' tly ' s t\\II'Sl.' l')' s I S organic. Recngniti l'
1
. c a tood crvcd 111
, . llll o t lc role " l . .
tkployllll' llt nl puhiK prucurel\ l\;;ll\ practices tog th,. .
1
. anl mtll1Vallvc
. . c cl Wtt l mcrcascd '" . .
pwv 1d, h,,llth. l'lh 1catu>na I and wei rare benefits with . . . lcsourccs could
posltlVC unpacts upon lo .. , t
regional Such arc potentially hor ...r , . Cd am
. 1S IC, plogressave and su tainablc
tor ::\ uch an tncludc encomaging 'lW'lfC d .
< ( nes an education amon ,
puhiK pnlcurcnll' llt hangn1g the dictarv aspirat1) 15 " d g
. . . . - ; ' .., <
1
,m non11s umong users of
pubhl tnstttuttons, p:uKhng the ca1)ability ofth uppl d fl 1 " y-s1 e o oca markets
to fultil srak or publi c cont r:lcts. .
and 101lcy (2002 ); Morgan (2004)
Example 8.4 Demanufacturing, recycling and local development
A p1H\Jill ia lly h1>I i st i' and nahk .1pprnach capublc or gc1Prating local and regional
dcve t hen eli t s is based 1>ll ' 1k manu rnct uri ng' and recycling. In context of glob
and intcnsitkd rapid t rhnologi nl change is rl;ducing the duration
1' f the I i fc 'yc ks of prod ucl s nml i ng t h , t urno' r of mm produ t de\ clopmcnt.
pmdu't ion. sa I e and nm sum pt ion. nhso I hnc created n growing problem
of what to do with unwanted hut pH..:nt ia Il l' usabl : pmducL, such as car . mobile phone'
and pc rsona I (0111 pulers. St>me prod uc1> haH' 11 d 1-dtw i<lJlC.I "' ondnl) thnt can
t
. . . I . .,. tl . , .. ,. s HI ll)cttl
cxtctH thctr usahk lt\cs. Others lurt tlltl'll!'l y pt u su t < o
-
' 241 -- ....__ __
ntanagctlll.:llt .
. . . . . . , t. lt" flr \ d pnl\' tCk the potcn-
Manu tadurl'S d1spnsl.d ot mhl s s \ . f
. . I I , . d n" ' ' tstl! the rccychng u
tral for the n:sponsihk trl.'atllll'llt and ll t.tl'..ll l " . . , )
. I . t ritls lll:t rkcb glas!i. coppt:l
secondary tnatl.:rials. the llf "'' l. ' .. . , . . . 'in
. . . D mtnuhctunJ1'1 1s produdton
and the lllllllicipal of Sllll d \\ l: ' e . f'or lo al
. .... . .. . . l 1 1 i ll o their Cl' rnp ll ll nt parts. '
reverse . Dtscarl.kd l.l
1
f' , h f{mncrl)
. . . . . . . , :tn bl' ' orn
and rec.tnnal dc\'doptncnt. l.'(\liHHlliL ,tdl\ It) l. , . st . 1h lt r qunx:d
'"
1
. . l'llll"d{kn.:d \)Ill ) .1::- '' a. v
neglected resuurles and assets that lut
11
c
1
' . ; 11 d
1
:1d1 anl.lgtd
.I. t t l r ' 'ltt,; l!lltpltl\ nt Ill
dist)osal New 'ldi\ities tul\ c ufl ISl'l " l . 1 ( s In
. . I ' .. I ' I l(ll.':ll l'Jl\ II \ )tlll1l l . . .
con1nutnitics and. sitnultancnusly. . , , ti)t l1l thl' b.t i of
. . . .. b pnn Hkd th.tt tH.l) J ... 1
entry-level st:mi-skilkd jnbs with trunung ''
111
' . 1 { ri tid>lll ' of .u.
1 1011
t.
. ' . stfl'' llll . 'd l( I
tnediatc labour anarkct paths hack lllhl llhllll . \ . t . r th. pt\ l bklll :wd thl! n t:
. . . I . t .. , h' maunJtlll c ll "' . f. f fH(l lw .. 't".
ttvcs potnt tn thcar sn1all 1..' '' tH.: ..
11
. ( f)
. lt'l thl.' "' l l " , L. t1" I l(}(}-t
tnanutadurcrs to do anul'h tll\ll'(.' lll suppl Soul"'-. l' o"t '

, t\ , ! l I ' \ '
Tilt llnlfts
lh'" in,\
11
'\'tl' a;!h l'.ll ,ft 't
1
i,lntll.'\l.'lhl1Ui indt\tdtt.d
th 'II 1.'lliH!h'llll\' l,h Ull \{
1
'':; IIHI.\
"!til ::;tnmlt,m log th "I "''\ll,tlhH'Hth ,1\ 1\l 1.'1 \ Ill.' .lit \ ' t i , l'
",,tld" i k int r gi,)u.tl dh i:-:hm ll f ltb,,u, \\ tth PI''''I'''"'"' htttlf ttl , ..
l'f HHtht.tl ,lid, .tnd sp,,i,dh \\ it h \\ PHl' ,,1 I. ' Pik\'11 \ 1.'
flliliuu t t .thl 1
'-
,u,h ,11.111 n u uut mount til '. Puhli ittsl ihtti\lt\!\, pot t h .tt n.ttiPH.tl
"-
k\ \.Ill b( \il I, luu_'sl,m llll' wl pottnti.tll. ftl! lt\ 11 ttt .,,tll'l' tl ''ith
d' il ,., ,)f th p1 in tpl '!\ md ' du : ,,r ldr.tl .u1 l t '!.donn I d,, '-' h'!Hll l't\t.
I h 'h' ,\1 ' ':-- iu I fl' 'tl ll' UJ 1.H\ \.l'll\:\tl'.ti l\t :' OH hl\ ,\1 Hlld I
lnpnh't\1. Fit;t, h li<'\ \' lut!' l' tlHI St \l hlh.'d th, llll l''ll

st,ll\'. lintt\11\
1
1\lt l''llh\ .hti\H\ llld d 'l\ltdtll.' its !HHI..' ltlinll\l \.' t:tih' l .tlld
llh''"' :11\d tu.d t \\t'.dth :tnd \H'll h"tng t i nt' ,,, It' \ 1\'\\
R.ll\wr l')l)n) '\ 1.'l. \\\' tt:--:\t'd in Cltopl\.:r L ,, ,. hl'ltt'\ 1,.' '"''I'
dotw td,lh,lhS. Ithllt th It th P"'"""t '" thr d ,i='tlll\' nllhlltltl.tl ittll..'ttmtl''""

I\.1(1\H\.Il !'1'\t' ltltl\t.'t \b lt ,ltl, ll Itt H\ II 't\ tl 'lll..'l\'1\ \'l'l\:"llli K' I :\

.tl\d lit\ ,ltld llh\tll!' 'l 'l\ \1)1) )) ( Plll.' l'rl\'d iut ' I l.'l \. lh\!ll' t\ \liPtt Hf lhl'
11lh'lii.UttHt,tl '' .tl tl\,1\ P'''' ""' p.111 ,,, .1 1"''\'llt i!tl \ lt cht .tud t Sntith
II . . I l l.
' \ ' I. ll 11\llll\t' tlt!\1 . \dH\tl .It the I l\'lt l , f ''' hlt Htl, IHI(IOII U ' \ I l \l\
h, 1.'1, t:n ri\Hl\ lh.;'llll' I \It ll'',, '\ lt . I . . . . I . 'l i l t\
" ' I .1 I. t 1\,tll\ 1.' ''' t H.' t\:tl 11lh'II H\tlt>IHtl ', 11\lg \l Ill I C.:.
P
1
,, ,. ,\ ptet qutsit t , 1 1 1 11
' ' u' Pp\t.l tntt . I 11: .1 l .tnd l'dtllphtth.:'l\lnl IP '
I I ... ' ' \II
' . l " I" "' II\!' " \\ ' ( h \I t h \\\ .Ill I I tl '\ I hIt \\ ,I\ ., ' ll t It ll \Ill It I H l
I\' ldt d,,,, ll . tlll\llllh ' . I I I I ' t. I
( t.lp IILI h\ 1\t\d 1\.'\' IPih lu -. h:qw I \\'II tl:H
''I' Ill \:'I I t Ill II t l: II\ i 1\1' I 't II " I\ 1\ . t II tl
, . . P '" .lll\\1\ .\ll' hl\\ II\ it \l l'l' .. U '
lnlllpl' lllhlll It tlw 1111 ' I . ' I l
l : "'"''"''HI :utd 1\;IIIPI\;tl tH I nl' r l,,hll lst11h''
\ ''dttglll'/l lltd \th' \ )() t 'c:
1. I:\ ( ). \\ ,111d (\\ \\1\.11 1.' \(1.'11\ tH)\ 1\ \ II \1 I
'' nt"s pur I hl ' th'\\ t 'i ' I . I HHIS
I I ( ..'' lll h 1\,.'
n 'l:' ''Ill\.' 11!'\'llh lll th\ci t ''' I . . s 1\ll'
'" \ l'\ \''''!''"''"' !tnd nnnin:->1 tt'F''l
11
CONCLUSI ONS
. t. i
1

11
Clnr>tcr 4. the detlining fitith and trust in puhlil' instt't t '
La!'l. as we suggt:-.. l:( ' .. . . .. . \1 Ions,
. . . . . d tr"ditiornl rcf11'e"ientaliV(.' dcmoct de) ,ut: s,ud to h"vt; undc. .
pub he scrvu:c!' an " ' ... .
1
llltnccl
.
1
t
1

111
.ll'V wd cupnctty of the st\tte ,tt the nctttonal, tt:Ptot Htl 'tncl
1
the autlwnty. eg
1
' c \ ocal
\'
.
1 1
?Q()J) Civil soctety and wnh f'l.
kvds ( \ cunwng, - '- J ms of

1 1
t1
1

11
nccc"iSHI')' cornplcmtnts to the dttnocrattc renc:wt l )r
dcmocmcy rmg l "' ' ( state
I
, d th morL' \\ tth c"pectalh local reg'o
1 orms an ... "" . na
... wkclwlckrs ( ll urnphrcy w1d ). As the nalrotwl \Octnl partnership in Ireland
I tl
. ''\
1
<l''tlCC collc<.:th cl) organi ...cd ctnd ncg<)tt' '" t '
am o ll:t ..... ..... . ct ton
can help and n:gional de\ dopmcnt periods of unprcce-
change (.\min nnd Thomas 1996). \\ clttc projects and shifting
pnorittes c<1n. con\ cr.., d). undcrmr dt:\ elopment as \VC su\v j n Scvillt!.
Supplementing well a" chaJk:nging rather than replactng and substituting the state
mtd through the autonomous and agency of civic
soctcty may provide tnslltuttmwl ... uppnrts for Inca I and regional dcvclopn1ent. State
Ct\ il society may not m:ccssarily alwa) '-')al ign. ho\vcver (Moulacrt et a/. 200S).
The political renewal of local and regional development
Our of the apparent shorkom of the nationa I state and possible response\
potnts to\\ the need rencwal uf the pol itics of loca1 and regional development.
Politics e\plicitly recognises the normati\ e chotccs about what local and rcgtonal d<;vcl-
opmcnt be about. when; and for whom. Such choices arc\ aluc laden - not simpl y
ohJecttvc and technical assl:ssments - and require inst itutional tncchani sn1s of ar1 icul a-
tion, ibcrat10n. and rcsol ut ion. They ab o rcqu i rc part ici ration. Local
and need not be something that is 'done' to people and places.
Achtcvtng and solutions to the question of what ktnd of local and reg1onal
development and for whom?' - in the manner or Keat ing et a/. (2003) di sti nctive
locall y and n.:gtontll v dct,.,.,,.ll .t1rd t1 d
( J ..... "' syn - tnay 1nvoJvc cotn protn tse, conf11ct an
llt!glc bet\\ snmctim , . .
. . . t..:s oppos tng Lt kc T hompson' s ( 1963) undcrstandtng
01 \OCtal ht storv the CUt an I th t f'
1
..
. J' u rus () po ttl cal practi ce w ill torgc the runcti onal and
of the t
1
. .
. . tns
1
uttons of coordtnatton and collecti ve order for local and
tt.::gHmal <k vdopment (sec S tt 1 t)t) o . . . ,
, . . . . ..co o). Whclt constttutcs success', 'fatlurc and devel-
opment tn localtttcs and rc ,i l . . . . . . . .
of' ,
1
, .. g ( lll c framed tt nd shaped by such procc'iscs and poltttcs
g< 'cr nmcnt and g<)\ ern an . . () ..
1
. d
. t ,.
1
.. . . ct: . cct( tng upon locall y and regionall y appropnate an
ruo e< tt ,tkgtcs and forms of I .. I . .
I" . .. . . . . occl ,md regtonal devel opment tna)' need a renewed.
< l;tnOt: ldt tsed. parttctpttor , t .
nP nt 1 . ' Y ant progresstve politi cs capable of addrcsstng the funda-
,, quest tons of what kinds f I .. . . ,
As we . .
1
h
0
oe,tl and rcgtnnal development and for whom?
.ngue( a ovc. the de lib . .
hy tl . . .. . t:rtttton <tnJ responses to the fundan1ct1t al quest tOns ate
l e lllk td<.: tton hetw .. tl . . . . . . I' .
pngrl.!ssivl'. d . . (;t:Jl H.: lllll vcrsal pnnctpl cs, our of ho tSt JC.
. clll Sll!'tamahl e loc l . I . . f
particular lo .. r . . . c dll< tegmnal dcvdopn1cnt and the speci fi c concerns
0
c,t lttcs dlld I'CJ!.tons. 1\ s S . ) . . 1
lll c: llt pro rar . . . .... cott ( I99X. I 17) suggests: Success r ul d< ve op
. g must tnl:vitahl 1 1 . . . . . 1 ud
JocalJ zclf COil)J). y )C JlltlCIOUS COtllbtnatJOI1S of ucneral prt nctp C cl
. IOilltsc. rd l c:ctin' tl . . . . o . . 'd al
n:gu111 '. Some I , . . . g l e <l etuttl geography and hi slory of each IIH.lt VI u
P tlct:s rnay asp1rc to .. take
.. '
1
IMittcular extent. or naturt; of growth that may
Plate 8.2 The state and public services: a maternity ward In Somalia
Source: Photograph by M1chele Allan
CONCLUSIONS
t 11 , tumaging social!)' unequal or
spcci fie forms, perhaps less volattlc. cnvtronmcn a ) c ' .
. . t romote lnpptncss HS a common
territorially uneven than httherto. Others may sec o P . ' . . . "'
. "' II b... ' I mmunll) cohcSHHl tn P' eft:rcncc
good tnorc capable of cncouragtng Wt: - ctng an< co
11
...
. . . . . . . . . C DP (La ard 2005 ). Places may co t:l:-
to a narrow focus upon tndtvtductl tnconlc ctnd ' Y , . ,
. . . . . . . approach to mccttng
t1vcly dcctdc to htntt growth and focus upon a c b l. lances between
. . .. 1 , i regions mav waut ettet ).J \
local and regtonal soctal needs. Loca ttJt..:S anc
1
. . ,.!,s' c sltldic of
r . "'ffiP c 111 our "'"'
t 1 i .. 'clor, ment .or ex"
economic. social and cnvtronmen d ' t..: \
Si I icon Valley, Ontario and Jal isco. . .
1
.
1
t that is tari-
1 I I regiOnal dcvt: opmcr
Sornc places may work towards a oca anc . . I , cially [llld cthllicaHy
. . . II'' ling or amcl JOratlllg r lt: so ' .. -
torially even. cc1ual and socwlly JUSt. c,t , ts l<l a pn,gr
5
.. ,. \l )l)conm:<..:.
1
. v 11 , s' in St tcon a t: d cncour-
dividcd nature of the wo a .. . w crcntrng an
. Other places may clSpJr<..: . ' C\ idcnt
sivc local and rcg1onal dcvdopmt:nt. . . .. . 1 innovattPll :-ystcrn .
d i rrumc f '"
aging a vibrant ' learning economy an t) '
1
:- <tnd raprc
1
' ; '
. . . , I . t . tblc to adapt to t tc l . ,c jl. nnd tugh \ n tK
tn ()nt'li'IO and Seville Jt:l er ' . . 1 ti \'l.' l11!.!h \\.le\.: 1 . 1
' . , .. ., . hie of crl.!atrng pt nt ut. . . ... . , , \ Milry tll odt
the internatiOnal economy and cct( <
1
.
1
.. ntnl to the ' l11gh wdd
1
t , rt: nc:w
r II . tainablc JO ) S t l ' . f I'. 'rn l .
added and cnvtronnwntct Y sus ' 1 .. . suswt nL:d pu' H.
1

1
Anudst
. S e nwy ' t.:s lfl: . I
and rcgtonal development. om
1
. trlil:r unndh aJH < t .
o Jelled l ll!ll c.;, ..
1
Vftl k)' JUS
the public thut pr I . . vtti slll C\'L:ll srl rcor
.. P" , . .
the growth propdlcd by tts '
Plate 8 3 lh
e PGiltlcs of local a n
of the Inner Lond ;d regional development: demonstrating against the abollflo
Source: Photograph by M. h on ducat/on Authority (ILEA) durin a the 1.990s
IC ele Allan b
CONCLUSIONS
'I tt o il S 1n;ty \\ant to find their own distinctive and particula f' d
tl . . . . . . r orms an ways of devcl-
,1.,111cnt fttttng to then own spectftc aspirations and nee 1 tb
1 t . . . , . , , . . . , . . . . < s, tt e 1 t s 1apcd by the
ombmat t Oll'-' ol mtct nell and cxtct nal assets, capablllltcs and const . t tl
c . . . ram s 1at people and
l
.,ht." L' S 1 au:. Y place w1 11 wtth the articulation atld re t . f .
' . . . . presen atJOn o Jts
0
,, 11 11olttt cs oJ unt vcrsal values, vtstons and particular concerns [ic)r
1
, .,
1
d .
. . . l,ca an rcg10nal
w1thJn a n:uch n1orc However uneven tht: reality,
Ontari o s recent upon a regtonal innovation system based upon
dist inctivc local and reg1onal strengths, mtcrscctoral trustful relations and
social learning situated within a North Atncrican and international context is evidence
of this approach.
L ltirnatcl y, a renewed politics of local and regional development hinges upon the
of who governs? Who decides and how do they decide what forms. institutions
and arc available to fratnl:, address and answer the questions of what kind of
local and regional devclopn1cnt and for whom? Our version of a holistic, progressive
and sustainable approach and renewed politics of local and regional development is not
a cal l for a parochial and introspective politics of place at the expense of other people.
classes and places (Beynon and lJ udson 1993 ). We explicitly reject any notion of a
rclati\ ist free for all , of local and rcg1onal development models developed in splendid
isolation. We believe in the potential of international intergovernmental coordination.
the role of the national state in concert with local and regional institutions of the
state and civil society, dcmocratised of government and governance
enhanced accountability and transparcnc} capable of empowering people, commumttes
and places, combining innovations in e and participatory a.nd
deccntral ised dccision-n1aking structures coordinating and integrating their rela.ttOnshlps
within n1ultil evel institutional structures operating across a range agenda
tnay be critici sed as utopian or too rcfonnist and insufficiently radacal m .
1
ts
. . r I I d . onal de\ clopment lS beset wtt
Yet \Ve sec that even our asptrat1on 10 r oca an reg I . . . . o
d
. . . .. e or Ill uttictently
potential batTicrs and problcn1s gran tosc t:o . . , k
. . t and coiJcctn c \\ ea
sivc political agendas, entrenched mtercs g . . ,
1
_
. . . . d state traditions tn rnultde\cl s;stt.:ms. um
governance and coordmatmg capac tty an ' f' 1
1
,1 ' ll'n c addressed in
bl' d , on manyo \\r11 Cl .)..., '
spiring leaders, disenchanted pu ICS an_ so - . . bl local and regional dt:\dop-
. ' ld. h l .. t Jrogrcssl\C and sustaJna c ..
thts book. But tng a o ts tc. 1 ' . . , . nol having the
. , , . . 'ohtforward task. HO\\C\Ct.
n1cnt ts by no tncans an ettsy or strait> . d t look like would make
. I I .. , )tn ... nt to do un o
of what \VC want local and rcgtona ( C\ c Ol t.:
such a task even harder.
Further reading . , .
. . I ....
. .. I I rcl!JOn<l t . .
. . , .. blc nature of toea ant -, su ... tatn-
On the holistic, progrcsstve and sust,una . . '-'or' . Guilford: \1org.tn. k. ( c
11
,, , 12(6):
. PI . NC\\. 1 1\. fJf mn<' ll < l
II udson R. (200 I) au_. . d cal
0
'. European an
1
1 p/ans in a
' . 1novatton ,tn s .
1
r )' Pf!ofJ e {/lie
able regions: governance, If . . on and Social ( wnp, . I 7 World
871 Pcrrons, D. (200
4
) A.J. ( !99X) Re;:i
011
' Ord,r. Oxford;
Divided World. London: Routle' g
1
. Competition and
. . j ' CJ
1
1Jal Protu/IVII,
The Conung Shape
0
' (
Oxford University Press.
272'
CONCLUSJONS
- .
1
. the<:;c-.. of appropnatc models of de' cloprncnt. sec K ' .
On the local and regJOnah r K ('003) Cultun. bl\titution') and Economu. D M.,
Loughlin. J. and Desc OU\\ cR. . - Cheltenham. Edward Eloar. <. 't ' oPment:
- d . .rEi lzt European egiOnS o
A Stu Y. of local and regional development. sec Han C). D. (2000) S
On lhC polroEcdaJ rb Edinburgh Univcr..,Jt)' Pres-... jJace'i
l{ Hope . . m ur ..... SELECTED WEBSITES
Centre for International Earth Science Information '\ctwork. Columbta _ Decen-
tralisation and Local De\ elopment
\vww.ciesin.org decentralization SB_entry.html
Centre for Urban and Regional De' elopment Studtes (CL RDS), Uni\ erstty of\c\\ e. UK
www.ncl.ac.ukcurds
European Association for Information on Local De' elopmcnt
www .aeidl.be
European Association of Develop1nent Agencies
W\VW .eurada.org!home. php
European Cities Nctvvork
\V\VW .curocities. org
European Commission Regional Poli cy (DG Regie)
http: europa.eu.int comm dgs regional_pohcy index_en.htm
Eurostat EU statistics di\ is ion
http://epp.eurostat.cec.eu. int
German Federal Ministry Agency
www. 'Yviram .de/toolkit
. Local and Regwnal Economic Development Toolkit
ILO - Local Economic Development
http://learning. itcilo.org/entdev/led
International Network for Urban Research and Action

W\VW .mura.org
. I " t Development Programme
OECD Local EcononltC and Emp oymt,;n 649 3441 7 l_l_l_l_l.OO. html
W\w.r.oecd.org/department/0.2688,en_
2
- -
Regional Science Association International (RSAI)
www .regionalscience.org
Regional Studies Association
www.regional-studies-assoc.ac.uk
UN Centre for Regional Development
www.uncrd.or.jp
UNCTAD
www. unctad.org
. Development
World Bank Local Economtc
]db k
o urban led
www.wor an .or.:::/
I
,
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I ,' 1.:11 IIJI 11 1111!1 fl n/ /Jill fll}' ',/ttn/ It Ill/ l'lttldt Jn'"IVIIIJ' lilt I ''I IJ' It' II/I fl i t' " I f /
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/11111//11' I' lll 1 1 l 1
f I"'' lllf' [alltl Lr11.111 I, v I11J}Ill til ,ftu11c
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Allen, 'l I J ' "'" t '''-=hlllll\:, A ( I'J'Jk) 1/w Ut 'J'I'Ifl I.<H&don
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l )tt tVCitHIY l'11 ,
Atrttta, A ( I'JW'} ' l' ,ttrullldiiJ' :11rd the de !t(loll ul Ill 11111', 111 I l ..cv.l, rwJ
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Ar11111, I' (c d, } ( PJ'J lJ /'u I luJtlt 111 ,t /(t'"''' '' (J lpal well
Anr l11 /'. ( I'J'J'J J Au 111 .1 J' 1 f'('Cli VC 1111 CJ'IIIIItl cv>tl!JIIltc dcvciHJH11 ' 111 !Ju, uwl/(lflltl
lutllwd uf l 'till/It 11111/ /11 Nn 'fllt 'h H2J' 3(1$ 17H
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luti n?' I:'n ronm 'JU ar. .tn .. : .... "f 3 J..:): .20 - - .:II - .
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or "tl'n-.. .. t1d pubhc
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Rodri_ .. : - A .. T . .' 1k. . ., 1... ... .. "lpO\\ through <.Xonomic rc-
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.. :! m BmLil: 0fthr ABC Jnml 450---46Q.
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xford Uni\ P:e:, ..::>
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....
D.A. \Volfe ( e<b) an .. S .. ial Learmng. lnstitmiona/ Adaptation in an Era of Tee lma-
logical B ..t'>mg tok.e. Paigravc Macmillan.
\Vood. _A. and Valier. D. COOl) Tum again'.l Rethinking in'>htutions and the go\ emance of local and
reg10nal cconomte . Emironmem and Planning A 33: 1 139- l 144.
\\ A. ( 19?4) .\orth South Trade. Employment and lnequulif): Changing F vrtunes in a Ski/1-Drilen
J1 or/d. Oxford: Clarendon Pre s.
\Voo Gornct. G ( "'00
1
) L o 1- . '7
. - . - u re.:>wna 1-acwn. huevos hon:ome, para Ia gestwn publica. GuadalaJam.
Mextco. Unl\ er tdad de Guadalajara and Centro linda', tJ
Woolcock. M 0 99 , soc 1
1
d .
olicv fra . . , ta an dcvciopment: toward a thcorcttcal
P . mc\\ork. Tm... o;T ana Sut..lt'l' 1.,. ''I "1()
\\ ld B . - - - I. I ..J - .
(
1992
) Export Pro(.t. Hmg Zones. Poltcy and earch cries 20. \\"ashmgton. DC: \Vorld
\Vorld Bank ( 1995) Th E _
4
. . .
U . p e a.H - .swn J\IJracle: Economic Grmwh and Public Po/icv Oxford: Oxford
nt\Cr ttv
. ' .
\\ orld Comml su.m on Environment d D .. . .,
Uni\ ersit} Pre. . an e\ clopmcnt ( 19, ) Our Common Future. o, tord: Oxford
Young, . and Hood, N. (1 <>95 I -Attractt . . . . . . . . .
market'. in A Am d J T ng. managtng and de\ elopmg mward In\ estmcnt m the stnglc
m an . omanc\ ( d ) B I d 1 d
Youn!.!. s. Hood ' . d p c !
1111
11e of European Cnion. London: Routle gc.
.. an l?ters E (1994) ' \ t 1
Re};wna/ Stutlie . 2 '"'t 7)
6
-,
6
... u tmatr onal entcrpri es and regional de\ clopmcnt
z . ). ''
J. (1996) 'The mvth of a .. ol b .. ,... . .
reg10nal realities \ .
1
p t .
1
::
0
al cndunng nati onal and emcrgmg
, ' l,; \ o llcca l:.conomy 1 ( 2): 157 184.
INDEX
. ote: page nun1bers in italic\ denote : o Table-.. and
accountabilit) 19. 20. 1-+3, 147, 271
Africa: economic stagnation 8:
procc ing zone 1 1: pO\ erty 26
agglotncrati on 70. 87, 90, 95, ll 1: cities
1
99:
........
endooenou.. th theory 15 7:
0 ....
e\.aooeration of benefits l 02: lreland 234;
00
Se\ ille 23 :Silicon Valley 215
agriculture 8. 247, 262
Allen. J. 35
Allen, K. 233
Atni n . .-\ . 93. I -+
An1sdcn . .A.H. 97
Arbi\. , G. 11
Ann trong, H. 69, 1 0-+
..... .
A EA?\ ee A ociation of South East
l\ations
A ia: export processing zones 181;
oo\' ernmcnt in ten ention 124: po\ ert) 26
0
Asian financial cri sis 5. 221
A .. ociat ion of South East Asian
(ASEAN) 31
a sociatiYe cnt rcpreneuriali sn1 46. 160 161
E. 55
Australi a: fi cal equali ation 145: regional
goYcmment 132: re ource distribution
126
:
' mart growth' 45.47
autonomy 19. 40

Ban galore "technology hub 169. 21 7

Beauregard, R.A. 256
Beer. A. 24
Belgium 132. 230. 231
Bellini. . 135, 136
Benner. C. 218
Black and Decker 189 190. l 9l
Bf\1\V 188 189
bottom-up approaches 16-17. 1 i. 40. 123:
Community Economic Development 51:
mtervcntions l "" 156. l i3:
governance 150: polictc and
institutions /34; post-dcvclopmcntahsm 157:
regional de' clopmcnt 133
branch plant economies 180. ISL 182-183:
East England l9S. 202-203: Ontario
206
Brazil: forei2n direct in\ c-..lmcnt 177:
GOP per capita 9. 9: regions :
participatory governance I49: regional
; 0: regional go\ ernancc 130 .
1
37- 139: territorial competition I I
Brundtland Commis:>JOn 4. 115
')-
Busan 198. 219-226. _) , _) 1
s I 63-164
Cain. P.J. 29
call centres 203- 204
Camagnt, R. 10-11
Camb;tdge Lni\ er:>ity 169 . . . .
C d
.. fi cal equaJiarion l-b;
ana a. t e 1 1
. tm"'nts ..,. ime tmt.:nt mccn I' '
"' - .,-6 ''7
. ..,o .., ', "'-+9 _) . .
Ontano 19t: - .) - - - t
- '"'63 110- "1 -. 1. rc!!ronaJ go' cmmen
J ) ' - - . ....
_ .._ __ .
1
, ..,
J_ . ., 'I
C
. "IIi G1ancarlo _)). -' .
anzam: . .
1
. ic t1 ectmomtr.s
. I iti quc ot nco-'" -
captta . cr _,
1
. tlO\\, :'. 14.>.
. . rt bnse thcof! ' .
68. expo ( - 6" \ l tn 1:-;t
. 6 1 6 I ) "\ )"' . '
labour rauo ....- . "f.
. . btlll \" J:'t). rh .. \\
approaches 4.
010
.., "j . .\ H s 1 (' 7:
bu. 16 1. 16- .-
see also \ cJpltal
' ' t . o9 167
capital mar"'-
I DE

.
1
" J '4
capita 1 :m -' - -- .
"4 nequaJJU<>i-1 .... ,. d.monaJ
-' . I "'Q
,rructure' 91 , '-
dt>\ elopment ,., J -1-": '"'fO: '' \.:
approa h (0 (J .. na\Jpment 25 .. I\
11
9
: re!!ulation th Of) tran .... mon d1c01 .: ...
'""6. 90
Cardenas Jimenez. Alberto _47
Caribbean l I
Car111in pro_ject _3 '"". 23Q. - 40. 242
, . lJ: ... , o--- - _: Bu-...:an _l9-22n lrdand
_, '\."" _44-2-+9: J .,,
c .. :l:n -2v5: Ontario .2 5 21:. \. . ille
-
on
ca_ on \1. -m
C
'A , .. - ... J1Q 4""
' t _ ... - . -.>u. - _, . - _..,
Cato. . """'tt 46
.
CEO see C E o .,L -- ic De\ elopm nt
C I
r 14 .... to qlj ......
e uc H!er . . --\'. -- - _J_"'
-
Cent rem \'. ''"t; ., ..ategy (CO'.'. S l49
Central \
Checklhuu. G. J 61
c '"C. P. i I. 12
Chtn(f. competition 43: foreign d1-ec:
in\e tment 177. 11 : GDP per 9. 9:
rcgiL n, : ..,arit.""
- .
72-73. ,, e imenemio.., 5
CincinnatJ and Femaie
..
Incubator 164
ci,il 19. 123.259. _6. 271:
Community 5 .
Korea n ,, -JC\ dopmenta> r."' 33:
principle' and \ aiue 44. 261l:
approach to de\ clopment public
admi?istration 145. ocial capttal 92. 9
3
:
u-tamable de\ elopment 116
cia 4:. 124
clu I 09-113, 122:
de\ 15 7. 168: 164:
209: Seville SillCOn \"aile\ ') l"
coahuons 133. 205 - -
Coe, 1 185, 1 . 1 9. I
91
cohe ion 24. 53-54.
54
Cohe-ion Funds 229
Cold\\ ar 26
47. 139-140.215. 217
coHectt\ e O\\ nership 161-16?
colonialism 29 -
community 46, 26l
Communitv Eco D
51, 120. - nomtc e\elopmcnt (CED)
comparath e advantaoe 18 J 9 1
27; ne,Q-das ical e ' . . globalism
economtcs 6
9
.
78
,
J n \\ trnd . th Of) I I 09: ee al 0
comp riti\ d' antag
"' v') .t I b
ompet1t10n: '. __ ,.,. ---t: g t al 1 '4

high "Jo" H). u dl:\ IOJ m nt 43:
imJ ... rfi-. t 69. I v -. 0 . l_ 1 11 \ all
_J6: 'ee al o omJ etith 'lh. ' , rritorial

c )fl1J 'tltton
omJ titi' ad' S. 16 1 4 . I_ 2:
d ., h: "
-
d 'doJ ' ""' 1 :-. 174: Po-k' "' 109-,, ....
-
II 1: '(. ' > conmarat ' (' al:' ..mt ...
-
romp titi' 0. .. _ .... -. 25...,. c t" c- 10.
1 I_ _:_ export ; ..
-
' tUtiom ''l) 90: .la 'co knowl doe
;;:
li.Jv. "0WleJ.:;c l u 7: ne\\
trade '" 1 : outpd Jro,Hn 6_-6.:':
031."'\.. "':-- .43: pyramid 114:
.... t3-+: !'\:;;ulation thcon \.t
-
. 167: set. u comnetition
ton\ endogenou gro\vth theorv 1 Q __

104. 107: European L moo 66-67. 6\. neo-

teal o2. 65. 66. 69:
i -19 .
coopcrati\ e 46. 160- I 61
core cumulatJ\ e 74: erowth
._
pole the "t: r: -76: approachc \4:
O\ 26: pohc) bia-; o9: product
cvcle 79

Corel 190-191
Com ford. J. 112
corporation tax 230. 232
Courchene. T.J. 212
CO \ S ec. Center on \\ Stratc!!v
2
creatl\ c clcr 176. 193. 209
creatl\ e 32. 217
Crouch. C. 125. I 30. 14&
.....
cumulati\ c cau::,ation ... 3- 74. 77. -l. 237
cycle
1
...9 82. J 21
Cypher. J.:\1. 30
Czech Republic J 32
Dahl. Robert 14
Dan. on. M. 133. 1 \7
at ion 31. ..,_, 26...,: Indld J4Q: land
234: Korea 19 . 222. 22-t. 225. 250:
multtlc, el structure-.. 2 71: new
130 .. 133. product C)Ck
79: profit C) de theon :)2: see
devolution
14. 29. 120: Ontario 20(.
209: radical critique 4: see ai'>V indu-..tnal
decli ne
delo . 261
demand 70 71. 94. 107
demnnufacturing 11 7. 26-
d mora) 1_9. 146-l-1. 2 __ -___ 6. _6-. _6 .
_71
Demnark /32. 139-141
dere2.ulation 29. 194. _11. 2_1; also
-
libcrallsation
de\'clopcd '- '1\ iron mental a\\ ar n
1 foreign tn\ -neT l7-. 1-u:
-- .. -
GDP per capita 9. 9: h1L; Jl Revolution
.... - : nfon11al cconomv 7. nco-liberal
-- . .
31
developing . ... t '-- _6:
l .... - L d
CfiVlfOllillCnta i:i\\ -- : ullf lrd
26-: fo:-etgn direct in\ e t:nc:1. 176: GOP per
capita 9. Y: "'ego'1, : .talitie
61 : econonn -. :ov ..
- -
neo-hb ral approaches 31: po .... i.-
dc' eloomentalL :n : l

d 1 t .. } ... ..,4 "'"'' "'"'" e\eopmcnt.)-t._) _,_ . J ------ -

ab olutc 39-40: agglomeration 7:
--
broadcntng of concept 2Q. 30. 31. 114:
e ad' antage t 09-110: c!c
h
. ,9 "'") d fi . ""4 .... , ... ... "'"'
t cones _: e muon - . --. - "
255: endoQ.enou-.. 1h theon t 02:
- ..
exoQ.enous 1-: 20!. 205 .. 210. _33.
-
2: o 251: tJtlure of traditional polictc'
13 16: from bdo\\ 29. 101. 111. :5 . 166.
t -3: geographtcal economics i07: 'ingh
and to" road- -+2. -t3. -k. 26Q: holistic
25o: andtgenous l :s : 74. _29.
-
233. 2-l-. 2-l, 2-JQ. 2:0-251: mnovation.
kno'' ledge and learning Q5. 101:
.. -
institut10nali m 90: Ireland 22\. .22Q.
233 235: Jah::.co 2-J -= nc"tan
approachLs -o: Korea limit to .
266 26\.: \lar'\.ist approaches 2-+: modcm,,t
notion: 26: '\orth East England 20 l-_02.
205: object .. and ::.objects -tq. -iY: Ontario
205 20b: political renC\\ al 2t'l. 2-l _:
de,elopmcnt 1 t -. 11 .... 120. 122: pnnc1pk
and \ aluc:-- 44. 45: e
256- 259: quantitati\ e \ s qualitati\ ..
-tO rebti\C -tO: C\dk .2 _,:-.
-s -q.
23 2-t-t: space 35: theor: . ..
su 'tainabiht\ 151. 2.:\q _
thcorie: S6: 25 .. 51 56.
1 1 9

19
'-' )"(' \\Ll\C u.2: see a/..:.
11
o .. -.... .. "
economic J('\ dopment: .
de\ clopmcnt _
1
. . 13" 'JQ"\
de\ coa tHons -' -
Y1f .,,; 2)0
de\ clopmcntal -- --' -- -
DE
"de\ elopm ntal 1 6
de\ elopmemali_m ;6 --_ "'
9
. th
. _ -- -.-.gr\\ poe
exp nm nt' 6: -ta=e th-.on - . -9
d \Olution 31. 124. _0-k Canada :2ll:
multlle\ go' emanc 144: n ... ,,
regionali m. 1:0. 1.31: orth EaS1
pron ... _o:: inequalitte 1-tl.
\\ (;, "" 4-: '' ea ' mmenL
146. f..'<' al o d... -nualL .. tion -
dia}OQU 19
-
Dicken. P. 1 u
Dietz. J.L. 30
dh rsifi at ion l 09.
di' ersit' 36.

Dixon. RJ. -,. --

donor-r ipient model 106. 106
D rtmund /6
Dublin __ 6. _30.
DunninQ. John 1-9-l no
-
e olo2.i al mode..., .... on 11
-
. - "' ) 9 .., 1
conomt, , "". :-. -t_. -- - --t
conomic 'l."ac oo
-
economicde\elopment '. _ ..t_:::
bran h I cl..'': Communit) E onomic
De' lopm nt 51. I _o: ER \ Er 1:6:
114. 146: growth
1ct-ion _::': J'" -..(' _4:' --""6: national
4--I-t\.:: ne\\ bu,in ... crea!ion
15 -io5. .... al capital 93:" 11-b... mg-' :
al o e onomic gr l\\1h
- ... - t - '6 ., '-
, .:-fficJen 'Y - .. -:--t. - .,. _ _, _ _.
,. 2'f0\\1h 4. 5. 19. _ ..t
contribution 15-. '- " na --: d 'dopm nt
oncept .30: J,:;, .. 41--L:
-"' n110' atJ.llJl 1-.'ll " lrd!"
m "quaht!L:i), ='- ....,
pr_:irelan119 --6.--:.
. b' - "'I Q '.l .... !l "' I: lo al 61: Ontano
10
' . ..... --
. - 4 6 - ,"
..... o- , -.. , , .... L')l t.' "", - "- -
I U " '''
- . - . .. -9 Jl 0
lJUabac elopmcm 11 .. _) : ' t h
' . ' d crowt
(.;'-.'l)numi , de' en og.mou:'
. , . . ...........dud !!TOWtJl
th 01): grl'::>=" ,-. :_ '. _ ' ..
It \ -t ,... 0 . I I
e onoUHL muon.li . : - I 0 I J I _2.
. re IV - . -
...,nomll.:- = h neo-
... I -. . ! , K.:-' :1 .,,,:n apJ roa ...
... \l ,. .
- ..
i .:.:onlmJ:-.' d "'1 pm .. nt
1 1
.. md.a, enou:- C""
1\'11 . _ .... d "''(} Qnt .. , _1)1);
1:\5. 16l. l 1: lr ... Jn - . ,- . ;\ ill.'
. I . t "11' 1 oJ-110. .
r
. , ,
1
orw , an.1 H
"'t"' . .. . .-f"'r :-.
- '' -- ..Ju th n ....
f t
i . , .-fob:tl pn u l .. o
t u n :.. = . , .
11
..-r,, :- -'
' I '- l \.} 1. UUit"" ,HI\. I
,=' .. \"I'
I
. . 91 "'"' - .
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Human Po\ lnd x
Huner-
1
Hvn;., .. h..,n I -9. 1 0

IDA et; Industrial De\ tlopment

Jdeolog) 1 24 . .
I LO see International Labour
I. IF s e International Moneta0 fund
immi2mnt: J -- ,...
... ub:titution indu-trit: I on (I I)
14

_ -. _10 . _=tO
incenth -15. li. 1 -- l:'ll. I -.191:
xport zor, , 1:_ -- :
orth East England _v:. lemtonal
ompetition 1 I
"l,;,p- - - 66 ... - la:si aJ
m orne-: mequ"' . .... - - - -
. 6- - \ II ., ' 1 .
economt - _ . on a - -. - .
:outh ..orea __ lJ-__ }: ..... :-egiofb :1
increasin2retumS - 3. i:i. r.:
-
II 0: ne\\ trade theory I 0 7. I 0
163-164
India: rechnolog) hub' 169. _I-:
-
competition 43: GOP per capita 9. 9:
industria] : participatory
go\emance 149: People Tree 263: state
in ten ention 5
. d' o d I "' -4 -" J -1- m 1-=enous e\e opmem __ - 1 . _)v-__ .
exi_tin2 bu ine- e: 165-169: .lreland _29.
-
J"3 )-o 1 1- ) .. - J4 JA9 J-t 1 bo
_, --. aLC0---:1.-. ur
market 169-1 7 3: ne\\ busine:ses
1- -16:
indhiduali_m 46. 160. 209. 211. 257
Indone-ia
industrial decline .5. 145: see also
deindustrialisation
Industrial Development Authority' ID.\)
228
industrial 6. 9. 94. Ill. 156. 15
indu trial 7-
....
Industrial Re' olution 25
indu.striali ation 13-14, 25. 123: Brazil
1 3
.. .
Jalisco 198. 244-245: 19, . 221). 2ll:
stages theon 7
inequalities 3_."8. 10. 52-53. 53. 61: capitalist
S)! tern 1 2.): case studies 197: China --,.
class' 193 de\ elopment 25. 3i.
:):>: de\ o1ution 141: e.conomic gro\\
1
h
)]-52: economic liberali ation S-7:
gender-based 55; income 52. 52, 66
234 235. 250, 256. 259:
KeynesJamsm 26 Korea 198 ">)-o 1 ..
h ' ... . arx1st
approac .es 84; orth East En!:!land ">0?
progressa\ e approach to de\ 256,
_ radi a1 \:!4: rt:du ing 24
..... ,
regional poli ) I- :-u tainabl
-
d'""\ 1 pm nt 1 1.3; 'ee al o t:quit) ; rt:gtOnal
di-- riti
inflation :
m1al ... ononl) -
infom1ation t .. hnol n . 165. 17 :
r hn log) hub 169: Jali \. o _4 : On;ario
20 . on\ aH .. _12- .: 19: ee al
0
h: hnoJog\
-.
run: 13. 14. 5. 17- 1 . 143.
indigt:nou.: d.,, e1on7'\.. nt I -6: Jali co 249;
s production ' region 100:
'" ille _39, _42. 2-t3
innovation ul. 2. 9. lt:\. 96-97. 121: Busan
__ .f-___ -: Lt IU. 112: critique of 102:
ndogenc ;TO\\ tb theory
11
1? -104. 103:
indig n< u Jevelopment 5 . 157:
interacth e m0Je: 96: Ireland 230:
kno\\ ledge tra"!., l 7: new ne-
-
founation 16:.+. l65: Ontario 211. 257.
_-I: regional policy 99-l 0 I: regi 1nal
' !)te:T'" 97; Silicon Yalle\ 212. 215
- - .
2t -. t!")ng/,, eak 97. 97
...
." 93-94
HblUutionaJism 6. 9(J-95. l 01. 107. 12 L 25 7:
critique of a_:: hbtorica: trajectories 94:
indigenou de\eJopment 156: innovation 96,
97: policy 9 i 95
interest group') 20. 44
International labour Organisation (ILO)
260
International lonetary Fund 28.
41-42. J l.._
im'"'mationa1i "at ion 150. 179. 180. I I. I 8.
210
56. 25-
interventionism 34. L 123. 124: Canada
21 0; Emtlia Romaf!tla 137: Kevn\!:>Jani m
..... .
76. 76
tment: balanced development -,t!"ategy 1 :
Ch1na 72: de\ elopmental targeting I 6:
de\ elopmentalism 2 7: endogenou- growth
theorv 1 03: functions of in\vard investment
.. -
infra tructural 13. 14. 15. 143.
269: Irc1and Jalbco 246. 249: 1 'orth
England 201. 203: Seville 239. 241:
Silicon Valle\ 219: S\1Es 167: territorial
competition 10, 11 . 12: transnational
corporations 1'6: see also foreign direct

Jnvestment
Ireland S. 198. 22Cr-235. 250 -251:
.. tment 18Cr-18"7. 190-191. 22 .. 229.
23 231. _32: inequalltie 256, 2-9: payroll
co t 231: ocial partner hip 147- 14 . 231.
250, 25 . 26 ; patial trategie-- 263: ate
. -
in ten enuon
lSI ee import- indu triali ation
ltal): Black and Decker case 1 9- 190:
ERVET 134-137; GDP per capita 9. 9;
13- 14: NorthiSouth income
gap 13: organic school food 26:: public
expenditure 125. I 26: regional go' ernment
132: \Vales comparison 114
' J 4-J49 J-Q J-) Ja. _4 - __ ) __ ) -.)
Japan . developmental ism 26: foreign direct
in, e 177. 179: i!"Cv!"le equalit) 52:
go' ernment I 3:
-
.k 'P B. 127. 12
3
K ld
... ...
a or. 1 1 .:>. 1
K
. 1 1 J9-130 1"' .... 16
. - . ..:>..J. -- -
....
Ke\ . John 69-70
- .
Kc)ne 1an approache 26. 29.69-77. 9. 121.
12+-1::!5: Canadas Plan 210:
cntique uf 77: cumulative ion i3-75.
-t 23- : expon ba e !heol) 10-il. 7-:
gT0\\1h role theory /5-76: increasing
return. - 3: multip!iers -o. 261, 262: North
Ed-,t England 1. 204: regional
pohcy - f'.--77. 76
Kirbv. P. 233
95. 97-0 . . 9 . :2:: critique of I 02:
.... .
indtgenou de\ elopment 1:6: ne\\ busmes-
fonnation 165: regional policy 99-101;
tran fer 99. 1 -
knowledoe 97-98. l-1. 1 76. i 6.
,:, -
193.
Korea 130. 263: Bu an JQ.
250. 257: de' elopmentah m 26: regional
go\ cmment /3J
Kru2:n1an. P. 10. 226
....
K
- 1 - ")
uznch. . ) . .)_
labour: balanced de' elopment trdtegie.
1

branch plant . 1 _"l: capitaL labour nlllv (4.
64. 65. 69: export ba:e theory 7l:
I
. . ocnJcr dn
, flexible accumu anon , , :::; T'
of 256: indigenou de' elopmcn_l
16
?-J
. h ..f mtllrauon 6 .
1 7 4: \ lan 1 t approac c = . . ....
- -
1
,.. i ., t - new bu .. ...
?2 mobil it\ I)), - . . . f 1 q-
. - . I d ' wn o , \. .
16
, 161 new intemattona t\ s k
- _, _ . ., ? J pro .. t
0
- ,
06
J09 pa\ roll -- _
ntano - - .. tl ") 1
I h
'1 . ..,. ilicon \ a
C\'C e t COr) -
-
DE
21 . 219: patial dl\i IOns of 6
1J) -- ) .., _ . .
- : ). -0..>. 5ee also emplo\m nt: human
capnal .,
Lagendijk A. 11_
Latin America: export proc mg zone
1 1
:
go\ emment imenemion 124: ....
1 po' en) 2
6
9). 9 - 99. 121: critique of 102:
de' elopmem 155. 156: Ireland
J""O 1 .
--' : eammg reg1on 100; 1- 0: ne\\
bu fonnation 165: Ontario 209. 2- 1:
regional policy 99- 10 l: Silicon Valle' n-
L ET ee Local Exchan2e T
liberalisation 5--. -9. 143. 2:-: Chlna -_:
Ireland _2 - __ 9: 19 . .?j5.
2 4-: trade 31. -4. 1 - : see also d seczulation
..
lobb\ 44
. -
Local Exchange Trading :cheme 1.
11.158,162
local 20\emance 146: Ireland 234:
-
Korea 22:. 226: North Ea t _04:
-
Ontario 211: Se\ ille 23-. _39
Local Go\emment ion 23. :r
localisation 157. 261-26_. _64
Loe\\ endahl. H.B. _03. _o:
1on2-\\ a\ e theon 2. 3 . .? L. _3
.
l
....
1&A see and ition
-
1cCombie. J. 69
]McDonald. F. _34
1ala' ia 1--
-
falecki. E. Jl-l-
n1ana2ed "orkspaces I 6
": . 100 JnO I I I 6 Susan
manutactunng /_'1. n
JJ JJ3 JalLco rorth East En=land
203: ontario _o6. _o
30
-
09
:
Silicon Valley
market failure 9_. L--
. . - I- 91-9 .
markets: mstJtunona . - . i ,
I e
- -,o nPo-class al econom
approac 1 ;:, .. . --
J
-9 -'
<'4-6:: produ t C} e =
- I ..... 1 .. 4
l\1a;... ... lJ. -t-'- -9 I9I-l92. 19_
Ann 69. . -
Marquand. D. 1 30--
AJfred
1
larsha11 Plan _6 ..
Martin. l j d on u-.. {!f0\\1b
fJ? n oa-. --
R
1'* .......... ::: l
Martin. : ('IU:-" - -o re!!iona
dteory l l:\: 'rw ro,
,
4
9 l .;n: lo"-r '-
Q'r0wth ' t .. I "'4- 6 r:l
- ' ' 7 .. v y
.1pproa 1 ... :--
,,.
... D . ..,o
M:Hrlt:r. F. 1-l.5
i\fa' cr. 1
.
mc:d ia l..J
i\krClbur 13q (\J& \)
1
cttvitv 176.
d
-.ttron '
rncn!Cf .m o.lcqUJ
17
-
7
'00 202. 2 I 0. 2-tS
.- . . 131
metropolitan rcgronalt. m "'"'
r r 7 II. _..:)
ml!troro rtan . : . . fon:tgn direct
\k\Jco cconolllJC cnsts - . ta <) Y industnal
Ill\ 7:. GDP per 2c:S' 2SO. 'lSI.
rcl.!tons 8: .lahsco 19(. . . I
..... d" r' q I() rcnJOilcl
263. regiOnal rspan 1<.;=> - :::
I
, ')
!.!0\ l'l1lfl1Cnt J-
..
J. 266
\1tCf'O'\Otl 190
"ltddlc c 1:\
J\lrddlcsborough 200
;nihtant particulansm 258
John tuart 62
Stac) 26 I
\ IJOSCl. L. 229
\1\ C-. \''multinational corporations
theory 26
modern i. m 26. 117. 120
rnonctansm 29
1\toman. K. 114. 141 142
....
mortalit) rates 53. 53
Geoff J 27. 15 J
...
rnultilen!l go\ernance 12-L 143- 146. 150. 194.
...
26 7: Canada 211. democracy 14 :

deYelopment coalit1on 133: horizontal

coordination 16 -17: institutionalism 91:
see also local go\ ernance;
governance
multmational corporatiOns (\1\ Cs) 79. 179.
I 232: alw transnational corporati ons
rvl urphy, J. 232, 233
\lyrdal. Gunnar 73
'AFTA see \ orth American Free Trade
A l!rccment
""
27
neo-cl_a. economics 62 69. 70. 87. 121:
capual market 16 7: comparati\ e ad,amane
78. 108: cri ti que of 68 69. endogcno:s
grO\\lh theory I 02. I 03. I 07: e\ idcnce
66; human capital 170: pol
(g t]V c IC)
) ' )o
nco-colonialism 29, 46
nco-liberal ism 4, 29. 120: Canada 209. 210
211; development 31 34 II (.. (t I . .
. , . o. cvo utton
14 I. post- \\ ashmgton Consen-..us. 33
Netherl ands 132, 228. 2
30

231

nd\\ or k" XlJ. 9-t <.h, I
1
1 g loh<tl
production I X I I XX. 194. L'r net net 12S
129. nH.figcnous dL'\ ":lopmcnt I 1 "' '
JrdJnd Or\.:sund rLgwn 140
\ ,tlk'\ 15 . .::! 16.

'\<.:" Dedi
1
6 . ..,6
'\c\\ l toundatton 261
nc" X..,
publtc managctncnt' J 29, 144. l4R
nc\\ n.:gionaJism' 31. 102. 124, 130 143. 146
150: de\ elopmcnt 157; inter '
rcgwnal competition 266: 234:
kan1ing 99
'\C\\ Rtght 29
...
trade theo0 107 I 09, 122
'\c\\ c,tstlc 41. 199. 200. 202
nc\\ h industrialising 26, 125, 12S

'\c\\ man. I. 259 260

non-capitalism 119 120
non-governmental organisations ("'GOs) 185
'\orth American Free Trade Agreement
(\At TA) 9, 28, 31, 178, 210, 246
East England 189 190, 198 205, 249.
250, 257, 258, 270
O'Donnell, R. 226, 229
OECD see Organisation for Economic
Cooperation and De\ elopment
O'Hcan1. D. 233
Ontario 198, 205 212. 249 250. 256. 257.
258. 263. 270-271
open economies 5, 3 I
0resund region 139- 141
Organisation for Economic Cooperation and
Oe\eloptnent (OECO) 33, 66. l 12: foreign
direct investment 1 78; new businesses 160;
regional government 130, 132
org\vare l 9
'
0 Riain. S. 230. 233. 234
O'Toole. Fintan 235
output growth 62- 63. 63
Paasi . .-\ . 35
Park Chung-hee 221
participatory go\ emancc l 49 150
partner hips 3, 123, 129, 143, 1 areabascd
regeneration 49; ERVET 136 I 3 Jrelan_d
14 7 148, 198. 23 1, 250, 258, 268; Ontano
Silicon Vall ey 213
Pasquini, F. 135, 136
path dependency 94. l 08. 200, 216
Peck. J. J 93
Pcct. R. 120
Pl:l lplc 2fl3
oplc-ccnlrcd development 34
regions 26, 29. 43: cumulative
causation 74: growth pole theory 75- 76:
Marxist approaches 84: product cycle 79
Pt_;rrou\, F. 13, 14
Peter", B. G. 144
Phelps, N.A. 188, 189, 191
Pi erre, J. 144
Pike, A. 261
place 36 3 7, 45, 56. 84
Plugging the Leaky Bucket framework 261,
262
Poland /32
policy: failure of traditional de\ elopment
13 fiscal 125; indigenous development
156, 157, 166. 167; institutionalism 94-95:
instruments 49-5 1, 50: Ireland 229: labour
market 145. 163, 169-173: macroeconomic
3 L 126; new businesses 160. 161. 163. 1 65:
Ontario political cycles 25; regional
governance 133 134; short-term 20; 5mallcr
states 131 133; territorial competition
1 1 12, /2; trade 108- 1 09; transition theories
89; see also regional policy
politics 25, 268. 271; Canada 211 democracy
147 United Kingdom 204: 4iee a/.\o
go,ernance
Porter, Michael 95. 109- 112. 113, 1 74
Porto Alegre 149
Portugal 9, 9.132,231
post-devclopmentalism 33, 34. 117- 120, 122:
critique of 120; indigenous dc\elopment
157 158; regional policy 118
po. t-Fordism 87, 89
post-struct ural ism 117- 118, 119. 120, _122
poverty 32, 170; Ireland 233: progrcss1ve
development Third World' 26
power 184, 185
pri nciples 44 48. 56. 257- 259, 266
pri,ate ector 128, 136- 137. 148, 20
9
pri vatisati on 2 7. 143. 150, 200 201.
204
product life cycle 79, 80
producti on 8. 88. 100 ?IJ.
7 2 52 170 Bu an 2?2 --
product1nty , ), , -
clusters I 12; endogenous gro''
1
h thcor)
43
.
1 04 'high' 'low' roads of development. .
.
6
2 63 64 Scv1llc
nco-classical economiCS - .
114
.
237 Sil icon Vall ey 214: US rcgwns-
'
Verdoom effect 75
profit cycle theory 79- 8
2
.
81
259
.
progressive development
26

256
260- 263,268.271
INDEX
=---
pub I ic ex pcnditurc 126 I 26 14- 229
bl
. . ), ),
pu 1c procurement 264-265
public protests 30. 170
ic sector t 28. 1 29. 158; 'orth East
20 I. 204; Ontario 211
qualitative approaches 40-41
quality of life 3. 4. 24, 30: Seville 23?; ;)man
grO\vth approaches 4 7
quantitative 40-41. 93
R&D \ee research and development
rad1c.al pohtical economy 84- 86. 121
RDAs see regional development agcncie.
recycling 265
L. 1 1
regeneration 2 7. 41: area-based partner:,hips
49: Community Economic Development 51:
North East Emzland 201-202: sustainable ...
approaches 1 J 7: \\'ales 46
regional con\ ergence: endogenous growth
theory I 02. J 04, 107: European Union
66- 6 7. 68: nco-classical theory 62. 65. 66.
69: stages theory 78-79
regional de\ clopmcnt agencies (RDAs)
"'133-137, 139, 181- 183. 186-188.204-205
regional disparities: China 72-73: devolution
26 7: European Union 66. 6 7: export
theory 71: Ireland 234: Keynesian .
approaches 26. 70. 76, 121: local
changes 61: ivtex ico 9- 1 0: nco-classJcal _
cconormcs 62. 65. 68-69. 121:
approach to development 2_56. 257:
Kinodom 267: venture capttal 161: .\ec al'o
inequalities .,
1 44
reg
ional governance 123-124. 129. 14J:- .
"' . ?48 '>)0'
145.146:Ireland234;Jalrsco- .- .
.
1
-m' 130-143: Ontano .21 L
new rcgwna ts
2P Se\illc 237: Silicon Valley :!14 .
- . "6 ?9 144 China 72:
regional pohc) - - , 105 1 07;
I I?. growt11 the of) .. - , .
- U . 66 67 inequaiJtle:; 1 .. 7.
European mon 99 10 1
. k vledue and leammg
innovatton. no\ :;:, ... -77. 76: Korea
Keynestan approaches 16 4
?'>? l: , I d ?00
--- 1 . 8 lorth East Eng an .. .
6 6 1 J
c J . ost-devclopmcnf .
20 1. 203. _O.f. P . blc de' clopmcnr
rcdistributn c 52: a/. o
'" "l -q 260: WOOlt:ll _,...,,
Jl) I 17 . ._.)
. 0 l(ll}'
policy . . . -o 96. I
'onill spccwilsJtJOn ' . '
. . ..
\t!e also ti Hl (RSI) 97. 'I
. . nfJnno\a '
rc. .:gional
1 OEX
'
. 11. .. '\\ rc!!ion. ' ,
rc(Yr n u - . .
:::- 9 J comp "Ul \ u
n: mJ!aln)u .' . - '-' . . J 14 ... trod'
. ntal J " : mtt.matton:l .
..: ' n' rronm
145
. h - _,\. 9 93. t.:l
re!!u' h t \n 1 ... l ..: _
- ., ..0 "'6,- 1
relnt .. '- - - -. . "' 1 I " 4
1
d dt.'' em'\n,rnt (R, D) I
n:.:-..a ., "' :>4 _2" dcfi n
1 6. J, . --. . . ,
'"6 . Jah,atwn
NVilt t, I - lU
P"" . - - "'"' ..........
"4 Q" G.:-mlarn 43 Irelan t __ ,. - .).
.... "'4 '"" onh ' _0.3:
J' 'I. - ' - -9 . .
(, , " 211: ' .J h.D
, ill _ 3 _ 4 ' on \ aH )
. h ..... "1 .,
n2 t ).)- )"'t
-
Rodri2u A. I I
- h I .... J ' J 16
Rob Moo- vun -- - --- ---. --

Roo e\elt. Franklin D. 26. -6

\\ . \\'. :6
R . ..l see S\ of innO\ ation
- .
Rui \\ . I
-
...axenian. A. 215-216
a}er. A. 90
J "" - "9 3- 4- _ca e .> - .> . . .)
charpf. F.\\'. 131-133
""'chump ter. J.L. 82
ience parks 16 -169, 168
Scotland: de\ oh ed go' emment 130, 13/: ne''
bu ine -e- 161: Silicon Glen 191. 192
Scott. A.J.: agglomeration r:-.7. l 06; economic
25 7: globalization 33: post-
structurali m 120: regional cooperation 266:
spares 3-: ;)ucce-sful t: rpment 268:
urbanisation 99
self-employment 158-159. 161. 172
222. 224. 226
senices I -6, 178. 190; Nonh East
201. 203-2 Ontario 208 ...
198,235-244.250.251.2:7,259.268
Siegel. L 218
Silicon Glen J 91. 192
Silicon Valle) 198, 212-219. 250 J)-6 ? .;; -
? -9 ., . - , - J I.
_) ,26.>, 269-270
Smgapore 6
Single European 1arlet ?8, 53-54, 178. 237,
265
,J\ilb 1 43, 1 d ., dopment
167, J69. 170. 171: S .,ille -36: Siltcon
\all ' 21 7 ,
ak R l ubli 170
and i cnt (
1 1 r..- 168. J 72. 17 : Busan Jalisco
' 1 \ alit') _ J 4
... "' 47 "'1 "'6'"' ,,.1an cr ' .... , .. ""t .. , - l
-
" \ ::-mall and nlt di d c 1 '-'I pri es
, ith. A tan1 62
'-jal .nit I 93
ial ..1'' 45. J 24
. "'4 -"' -4 -4
, .. ia1 t Jlnt< l'- . ) . -
-
..... tt. ial ononn
... ial nterr . :7. 15\:. 161. 166
...... ial ju-ric . ..J 151
ial 1 artn r:hip 14 7- 14 . 19\J. 231. 250.
2 - n . _6 : ::
1
'\? partnership
_o ial reJatic .., 35. 38. 9 I. 95. 2 . .;
iaJ '' elfare 4. - 49. 5
1
54. 69. 233
, 90-95. JOL 107. 11 I. 121 ,
2-7: collaboratJve relationship"> 216: critique
of 95: historical trajectories 94. rndigcnous
de\ eJopment 156: innovation 97 pol icy
9-r-95: :cale and socio-economic processes
37-3 . 37: Silicon Vallev 215

-oft,, are concept 18

software industrv 190-191. 192
*
-amalia 269
South Africa 132
South East 8. 13
outhKorea 130. l77.263: 198,
?]9 ?6 J -O J--. d"' "I 1 ?6 - - - . _) . _)I. c\. \,; opmenta 1Sffi ...
regional government 13 2
space 35. 45. 84. 88
Spain: corporate tdx 230: foreign direct
GOP per capita 9, 9;
industrialisation 14; La Rwja 36; payroll
costs 231: re2ional QO\..!rnment 130, 132; ...., .....
Seville 198. 235-244. 250. 251. 257. 259.
268
Spatial Oe,elopment Per pective 45-46, 48
spatial policy 49
specialisation 70. 84. 262: flexible 86-87;
indigenous development 174; innovation 96:
new trad<: theorv 108. 109 .,
pillover ertcct : clusters I J 0: endoQenous
......
growth l 03. l 05: innovation.
knowledge and learning 95: labour activities
193: new trade theorv I SiJicon VaHey
.,
215; technological knowledge 157
stages theory 26. 78- 7 9. J 2 I
-
18. 19. 20. 268

ttnfot d Uni vcrsity 169. 216

sH:tc 123, J 24, 130. 259, 266. 271;
decenlralhmtion 31: dcvdopmcntal 221 , 230,
233, 250: Fordi m vs flexible accumulation
88 tabour market policy 145; legitimacy
26S: tv1arxi t approaches 84: multilevel
govcn1ance 144: principles anll values 44:
approach to development 257:
rok 143: rolling back the 29. 129:
transfonnution 127 1 I 8; see abw
uovemmcnt
::;,
Stoker. G. 129. 130
Storpcr. agglomeration 87. I 06: economic
development 24: globahzation 33: spaces
35: urbanisation 99
Streeck. \V. 1..J5
stntctural adjustment 2 7. 31
Structural Funds 229. 234. 237
stntcturalism 34
ubsidies J 5. 1 7
Sunderland 200
Sunlev. P.: clusters 112: endogenous growth
f)' 105: innovation: knowledge and
learning I 02: local economic changes 61:
market forces 70: path dependency 94:
regional growth 89. 90: spillover effects
108
supply chains 183. l 87
su:stainabilitv 253. 259-260: development
- - ?
concept 31: environmenta124. 26. 1.:>1-l)_;
and 45. 48: quantitative \ s
qualitatl\ e approaches 40: sman growth'
approaches 4 7
development 3-4. 113-117. 122.
251. 259-263: critique of 117:
empowcnnent 19: 45.
256; indigenous de' eJopment I) 7. I .:>8:
Ontario 209. 212; political rent'-' aJ 26S.
271: principles //6: regional policy
115 117: Stlicon Valley 218. 219;
traditional development policie 14, I?;
\\'ales 142: weak vs 40, Jl)
])..,
S"'eden 132, 139-1 41
S\\ ltLCrland /3.:
S\{.lntv 185
.
Taiwan 26. I 77. 217
Tavlor4 J.69. 104 ......
8
"44
., t tC0 ) ' I.) - -
technoc1lv development " ra - ,
69
.
" . ,., h Jouv hub 1
technolouv: Ban!!alorc t\,;c no :::. k
e. 187 ofobaf nctwor
stratcgtes . o , 81
Ireland 229: long-wave theor) -
I
economics
6
3-64,
65
.
69
:
new busmess fonnation 164 165 0 t .
?OS ? , n ano
-. profit cycle theory 81; regional
dasp_antaes 69: science parks I 6S 169. 168:
Sevllc 23?: soft\\! are industry 190 19 J.
192; sustamable development 1 16:
25, 64. 103
1 04
;
also mfom1at1on technology
Tcnnan, Frank 216
territorial competition 10 12, 36, 194,257,
266- 267: 'nc\\ regionalism' 146; orth
America 212: policies 12: regulation 270;
T 'C 175
territory 35 36, 45. 56
'Third \Vav 31
Thirlwall. A.P. 75. 77
Thompson, E.P. 268
Thrift, ' 93, 184
TNCs see transnational corporations
Tomaney. J. 145, 200-201
top-down approaches 13, 16- 1 7. 1 i, 26, 40,
123: indigenous resources 155; policies and
institutions 134: Seville 243
tourism 8, 237. 247
trade 4-5: Canada 210: disputes 38; fair
262- 263; international regulation 145:
31. 74. 178; neo-classical
economics 66: new trade theory 107- 109.
122: Se' ine 236
trade unions 149. 185. 189. I 90. 231
traininQ 168. 169. J 71. 172; Jalisco 248;
..
Seville 239. 240-241
transaction costs 87. 9 3 111. 12 I. .
transition theories 86-90, 1 11' 121 : cntJque of
90; 'development from beiO\\- 89. .
flexible specialisation 86-87; :new mdustnal
87: policy 89; theory
87-89: transaction costs 81
transnational corporations (TNCs) 146, b I
1 J-6 179 olo a
175-194: economtc roe I . . e J28.
production netv. orks 18 J -188, Ireland -,
? 31-232. 233: theory of 1 79- I 81: see a so
linational corporations
tran parency 19. 20. 143. 271
trickle dO\\ n' effecrs 74. II
trust 91. 92, 99. 128. 209
Turkev 132
Tyne ... Ri, er 42. 200
UK see United Kingdom -9
I
nt rheor)'
1
underdeve opme . De' efopment
UNDP see United Natlon
Programme
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