The development of regional competitiveness as a powerful policy discourse has been built on the co-evolution of academic literature and policy practice around a series of influential place-based concepts. It also coincides with evolving theory and practice in policymaking, by which policy is increasingly seen as an outcome of dialogue and decision-making processes among networks of place-based agents, breaking down the traditional public_private divide. The confluence of these trends is very clearly evident in debates on territorial strategy, which in Europe have taken shape around the notion of regional innovation strategies for smart specialization. The aim of this chapter is to discuss regional competitiveness policy in today’s era of smart specialization. The emergence and evolution of regional competitiveness policies is traced, with two of the most influential place-based competitiveness concepts _ regional innovation systems and clusters _ highlighted. Sources of policy complexity are identified in the interactions between distinct policy rationales, the multiple policy domains and difficult processes of instrument choice, and the presence of multiple actors at multiple scales. Governance and learning processes around policymaking are increasingly important, an aspect that is prevalent in debates around smart specialization. The chapter then addresses the concept of smart specialization, making links with previously analysed features of regional competitiveness policies. This leads to a series of concluding reflections that disentangle the novelty of smart specialization strategies from other policy approaches and highlight some implications for the way in which governments operate around regional competitiveness policies.
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Mari José Aranguren, Edurne Magro and James R. Wilson
Philip McCann and Raquel Ortega-Argilés
The notion of competiveness is not without its detractors. However, it has evolved largely outside of orthodox economics in the engineering and management disciplines, and emerged primarily as a systems type of perspective and approach which is also central to modern analyses of both entrepreneurship and innovation. Over time the concept has become increasingly adopted within mainstream economics and is regarded as having particular relevance in the context of regions and geography. The concept has now become a central pillar of many economic policy narratives within the international arena and also plays an important role in the international policy transfer agenda. This is particularly so in the case of the European Union smart specialization agenda, which although emerging from slightly different origins and emphasizing different priorities and mechanisms still follows many similar or related principles to those highlighted in the competiveness literature. This chapter examines the evolution of the concept of competitiveness and discusses its increasing application with regard to identifying the underlying economic performance of regions and the appropriate and relevant policy settings which might be employed in order to enhance such performance. Its importance in partly influencing and shaping some of the themes of the smart specialization agenda of the European Union Cohesion Policy are discussed.
Frank van Oort and Mark Thissen
Analysing regional competitiveness by benchmarking regions on various indicators is a common practice. However, such rankings of regions are not based on actual competition; instead, they compare a set of regions on various indicators. This chapter benchmarks regions using a measure for revealed competition based on product-specific spatial market overlap on firms’ export markets, on knowledge cooperation among scientists, and on the attraction of foreign direct investment (FDI). This analysis shows that this revealed competition is not only spatially different for these three types of competition, but that it is also region- and market-specific. This confronts policymakers with complicated place-based decisions concerning investments aimed at enhancing a region’s competitive position in Europe, which is far more complicated than suggested by existing benchmarking exercises. The chapter illustrates this with the example of the city of Utrecht, which is currently the most competitive region according to the European Regional Competitiveness Index.
Roberto Cellini, Paolo Di Caro and Gianpiero Torrisi
The concept of resilience has attracted increasing interest in regional economics. In the flourishing literature, however, results are mixed, even when referring to the same case study. This mixed evidence stems also from different operationalization of the multifaceted resilience concept; the main difference being between studies using gross domestic product (GDP) series and those measuring regional economic performance in terms of fluctuations in employment levels. It is important, therefore, to address what kind of relationship – if any – exists between the two measures. To this end, the chapter analyses and compares results concerning regional resilience in Italy over the last 40 years, focusing on the differences deriving from the choice between the two aforementioned measures. The analysis reveals that the information contained in the different series are not alternative and overlapping but complementary.
Joan Crespo, Ron Boschma and Pierre-Alexandre Balland
The resilience concept refers to the capacity of regions to deal with shocks. The concept, however, remains ambiguous and under-formalized. This chapter develops a conceptual evolutionary framework for regional resilience that distinguishes three dimensions of resilience: (1) the sensitivity to a shock; (2) the recovery from a shock; and, above all (3) the ability to transform and create new growth paths. It discusses the main factors that affect each of these resilience dimensions: the industrial and technological structure of regions, their network structure, and their institutional setting. In doing so, the chapter sheds light on the links between regional resilience and regional competitiveness.
David Audretsch, Hugo Menendez, Aileen Richardson and Apexa Mamtora
This chapter suggests a framework for policymakers and thought leaders in conceiving, formulating and implementing policies to enhance regional competitiveness. The discussion links four fundamental underlying forces of regional competitiveness: the first involves production factors and resources within the region; the second comprises the spatial structure and organization of economic activity; the third encompasses the human dimension; the fourth consists of policy. The chapter explains how and why each of these elements contributes to regional competitiveness and how they integrate in shaping the economic performance of regions.
Territories may be conceived as multidimensional spaces, where each dimension represents the presence of stocks of single types of territorial capital: location, size, quality, internal and external interactions. Relationships of a functional, hierarchical or cooperative nature may take place within the single dimension (economic, social, environmental, cognitive, identitarian) or, more interestingly, among the different dimensions, generating huge and diversified cross-externalities and synergy effects. The conceptual breakthrough allowed by the relatively new concept of territorial capital consists in the almost infinite widening of the structural and functional relationships that are assumed to determine the growth potential of single places/regions, along the scientific trajectory of the last 70 years in the direction of an ideal place-based production function with heterogeneous capital assets. The full spectrum of territorial capital types may be considered and included, provided that good measures or proxies are available. The goal of this chapter is to make an assessment of the utilization of the territorial capital concept in regional development studies, from its development in 2001 to the present day. This includes analysing its definition and role in the interpretation of spatial development, before exploring its theoretical soundness and use in a regional production function. The latest empirical findings that use of the concept are then explored. The questions concerning its nature and intrinsic heterogeneity that remain open are considered, before concluding with the new contents and styles of policies suggested by the utilization of the concept.
As economic research has increasingly paid more attention to the forces of economic geography, it has become much more ‘location aware’ in its analysis of the drivers of growth, productivity and innovation. The nature of regional policy has also evolved in many countries, with competitiveness upgrading emerging as a more important goal. In Europe, requirements for regions to outline ‘smart specialization strategies’ to be eligible for funds available through the European Union regional policy programmes are an example of this trend. This chapter explores what this new context implies for the role of regional governments. It is motivated by a concern that regional policy is facing an ‘implementation gap’. There is much thinking on the importance of regions, and the policies that should be designed towards them. However, there is comparatively little work on what regional governments’ role should be in implementing these policies relative to that of other levels of government, and what implications this has on the capabilities required. The chapter reviews the literature on regional economies, regional policy and the role of regions in government. These related streams of work provide the backdrop for thinking about the demands that government in general and regional government in particular are facing. The chapter then proposes a new way to look at the role of regional government, focusing on specific functions and the different but often complementary roles that different levels of government play. It draws on this identification of functions to discuss the capabilities that regional governments need to fulfil their tasks.
The determinants of a region’s competitive advantage, and therefore its ability to sustain economic progress, are the quality of local productive inputs and how well they complement each other. Theories of regional competitiveness in the advanced global North have placed emphasis on ‘soft’ or intangible assets at the expense of physical resources. The tendency to relegate the importance of the built environment also stems from its perception as an inert productive input with diminishing returns, rather than a dynamic resource and a source of ongoing improvements to productivity and competitive advantage. This chapter argues that the urban land and infrastructure system (ULIS) is a cornerstone of regional prosperity and too important to be neglected. A functional and adaptable ULIS amplifies and reinforces the other, softer drivers of competitiveness. Improving the ULIS is particularly important for countries in the global South that are undergoing rapid urbanization in order to accelerate economic progress. Better urban management could help to prevent worsening urban congestion, land-use conflicts, squalid living conditions and a host of related problems. Neglecting the urban form will give rise to common-pool liabilities rather than decent and productive places. It will lock in inefficiency, poverty and social exclusion for decades. This chapter examines the three core pillars of the ULIS: land management, infrastructure investment and coordination of the built environment. Each has an independent effect on productivity and development, but as the chapter illustrates that their influence is enhanced if they combine together and reinforce each other in a cumulative, city-wide process.
Pengfei Ni and Yufei Wang
Accompanying the rapid development in science and technology, newly industrialized countries have been growing and advancing sharply, and the urbanization process has continued apace around the world. Two streams of research have particular importance in this context, the first being the sustainable development of cities, and the other a stream consisting of studies on urban competitiveness. However, only recently have the two been considered together as sustainable urban competitiveness. With an increasing global urban population, sustainable urban competitiveness has increasingly become a hot topic attracting attention from city managers, social organizations, and city experts. This chapter examines the extant literature to develop a conceptual framework and indicator system of sustainable urban competitiveness from which a global index of sustainable urban competitiveness can be created. Drawing on data for 500 cities from five continents, comparisons are made. The results indicate that overall urban sustainable competitiveness in the world is relatively low. Only a minority of the cities display high levels of sustainable competitiveness while the majority display lower levels. Those with the highest levels of sustainable competitiveness are global cities controlling high-end resources, factors and markets. North America has the largest proportion of cities with higher sustainable competitiveness, whilst Europe has the greatest disparity in urban sustainable competitiveness with a large number of cities displaying either high and low levels of sustainable competitiveness. South American cities generally have a weaker performance with regard to sustainable competitiveness as do those in Africa, which lacks any cities displaying higher levels of sustainable competitiveness.