The economic development case for regional governance

This article examines the economic case for a strong regional tier and suggests that further research is required to identify the level at which certain responsibilities or policy initiatives are most effectively administered.

Regional benchmarking in a global context:knowledge, competitiveness, and economic development

Benchmarking exercises have become increasingly popular within the sphere of regional policy making. However, most exercises are restricted to comparing regions within a particular continental bloc or nation.This article introduces the World Knowledge Competitiveness Index (WKCI), which is one of the very few benchmarking exercises established to compare regions across continents.The article discusses the formulation of the WKCI and analyzes the results of the most recent editions.The results suggest that there are significant variations in the knowledge-based regional economic development models at work across the globe. Further analysis also indicates that Silicon Valley, as the highest ranked WKCI region, holds a unique economic position among the globe’s leading regions. However, significant changes in the sources of regional competitiveness are evolving as a result of the emergence of new regional hot spots in Asia. It is concluded that benchmarking is imperative to the learning process of regional policy making.

Foreign direct investment and economic development:an interactive relationship

With the increasing importance of Foreign Direct Investment (FDI), there have been substantial studies on this issue, both empirically and theoretically. However, most existing studies focus on either the impacts of FDI presence or the determinants of FDI inflows, ignoring the fact that inward FDI and economic development may simultaneously affect each other. This thesis sets out to examine the interactive effects between FDI and economic development. The whole thesis is composed of five chapters. Chapter One is an overall introduction to the thesis. Chapter Two presents a theoretical study and chapter Two and Three provide two empirical studies. Chapter Five concludes. Chapter Two presents a theoretical two-sector model that features the importance of human capital in attracting foreign investment. This model theoretically explains why FDI is more likely to occur among countries that are similar in terms of human capital and technology. On the other hand, MNCs must train local employees to work with firm-specific technology and hence improve the technological skills of local workers. In Chapter Two, an empirical model is constructed to detect whether the productivities of foreign and local firms impact each other. The model is tested on China’s data at the industry level. The results indicate that productivity growth of local and foreign firms are jointly determined. Evidence also suggests that the extent to which spillovers occur varies with difference technology levels of local firms. Chapter Four investigates the relationship between FDI and economic grown based on a panel of data for 84 countries over the period 1970-1999. Both equations of FDI inflow and GDP growth are examined. The results indicate that FDI not only directly promotes economic growth by itself, but also indirectly does so via its interaction terms. There is a strong positive interaction effect of FDI with human capital and a strong negative interaction effect of FDI with technology gap on economic growth in developing countries.

An assessment of the industry cluster approach as a tool for local economic development:the case of the new media industry in Birmingham

Industry cluster policies are a current trend in local economic development programmes and represent a major shift from traditional approaches. This trend has been coupled by an increasing interest in new media industry as a significant focus for regional development strategies. In England clusters and new media industry have therefore come to be seen as important tools in promoting local and regional economic development. This study aimed to ascertain the success of these policies. In order to achieve the aims of the study, the Birmingham new media industry was chosen for the study. In addition to an extensive review of the literature, semi-structured interviews were conducted with new media firms and Business Support Agencies (BSAs) offering programmes to promote the development of the new media industry cluster. The key findings of the thesis are that the concerns of new media industry when choosing their location do not conform to the industry cluster theory. Moreover, close proximity in geographical location of the industries does not mean there is collaboration and any costs saved as a result of close proximity to similar firms are at present seen as irrelevant because of the type of products they offer. Building trust between firms is the key in developing the new media industry cluster and the BSAs can act as a broker and provide neutral ground to develop it. The key policy recommendations are that new media industry is continually changing and research must continuously track and analyse cluster dynamics in order to be aware of emerging trends and future developments that can positively and negatively affect the cluster. Policy makers need to keep in mind that there is no uniform tool kit to foster the different sectors in cluster development. It is also important for them to be winning support and trust of new media firms since this is key in the success of the cluster. When cluster programs are introduced they must explain their benefits to industries more effectively in order to encourage them to participate in programmes. The general conclusions of the thesis are that clusters are a potentially important tool in local economic development policy and that the new media industry has a considerable growth potential. The kinds of relationships which cluster theory suggests develop between do not, as yet, appear to exist within the new media cluster. There are however, steps that the BSAs can take to encourage their development. Thus, the BSAs need to ensure that they establish an environment that enables growth of the industry.

Urban labour, voice and legitimacy:economic development and the emergence of community unionism

Community unionism has emerged in the past decade as a growing strand of industrial relations research and is influencing trade union strategies for renewal. This article seeks to further develop the concept, while exploring the potential roles for unions in communities subject to projects of urban regeneration.

An examinaton of how British local authorities are employing strategic planning and management in their economic development function

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Local economic development initiatives and the transition from training and enterprise councils to new institutional structures in England

Current British government economic development policy emphasises regional and sub-regional scale, multi-agent initiatives that form part of national frameworks to encourage a 'bottom up' approach to economic development. An emphasis on local multi-agent initiatives was also the mission of Training and Enterprise Councils (TECs). Using new survey evidence this article tracks the progress of a number of initiatives established under the TECs, using the TEC Discretionary Fund as an example. It assesses the ability of successor bodies to be more effective in promoting local economic development. Survey evidence is used to confirm that many projects previously set up by the TECs continue to operate successfully under new partnership arrangements. However as new structures have developed, and policy has become more centralized, it is less likely that similar local initiatives will be developed in future. There is evidence to suggest that with the end of the TECs a gap has emerged in the institutional infrastructure for local economic development, particularly with regard to workforce development. Much will depend in future on how the Regional Development Agencies deploy their growing power and resources.

Place-based economic development strategy in England:filling the missing space

This paper examines the implications of a place-based economic strategy in the context of the UK Coalition government's framework for achieving local growth and the creation of Local Economic Partnerships in England. It draws on the international literature to outline the basic foundations of place-based policy approaches. It explores two key features, particularly as they relate to governance institutions and to the role of knowledge. After examining key concepts in the place-based policy literature, such as 'communities of interest' and 'capital city' and 'local elites', it shows how they might be interpreted in an English policy context. The paper then discusses a place-based approach towards an understanding of the role of knowledge, linked to debates around 'smart specialisation'. In doing so, it shows why there is an important 'missing space' in local growth between the 'national' and the 'local' and how that space might be filled through appropriate governance institutions and policy responses. Overall, the paper outlines what a place-based approach might mean in particular for Central Government, in changing its approach towards sub-national places and for local places, in seeking to realise their own potential. Furthermore, it outlines what the 'missing space' is and how it might be filled, and therefore what a place-based sub-national economic strategy might address. © The Author(s) 2014 Reprints and permissions: sagepub.co.uk/journalsPermissions.nav.

Empirical analysis of human capital development and economic growth in Europe

Recent discussion of the knowledge-based economy draws increasingly attention to the role that the creation and management of knowledge plays in economic development. Development of human capital, the principal mechanism for knowledge creation and management, becomes a central issue for policy-makers and practitioners at the regional, as well as national, level. Facing competition both within and across nations, regional policy-makers view human capital development as a key to strengthening the positions of their economies in the global market. Against this background, the aim of this study is to go some way towards answering the question of whether, and how, investment in education and vocational training at regional level provides these territorial units with comparative advantages. The study reviews literature in economics and economic geography on economic growth (Chapter 2). In growth model literature, human capital has gained increased recognition as a key production factor along with physical capital and labour. Although leaving technical progress as an exogenous factor, neoclassical Solow-Swan models have improved their estimates through the inclusion of human capital. In contrast, endogenous growth models place investment in research at centre stage in accounting for technical progress. As a result, they often focus upon research workers, who embody high-order human capital, as a key variable in their framework. An issue of discussion is how human capital facilitates economic growth: is it the level of its stock or its accumulation that influences the rate of growth? In addition, these economic models are criticised in economic geography literature for their failure to consider spatial aspects of economic development, and particularly for their lack of attention to tacit knowledge and urban environments that facilitate the exchange of such knowledge. Our empirical analysis of European regions (Chapter 3) shows that investment by individuals in human capital formation has distinct patterns. Those regions with a higher level of investment in tertiary education tend to have a larger concentration of information and communication technology (ICT) sectors (including provision of ICT services and manufacture of ICT devices and equipment) and research functions. Not surprisingly, regions with major metropolitan areas where higher education institutions are located show a high enrolment rate for tertiary education, suggesting a possible link to the demand from high-order corporate functions located there. Furthermore, the rate of human capital development (at the level of vocational type of upper secondary education) appears to have significant association with the level of entrepreneurship in emerging industries such as ICT-related services and ICT manufacturing, whereas such association is not found with traditional manufacturing industries. In general, a high level of investment by individuals in tertiary education is found in those regions that accommodate high-tech industries and high-order corporate functions such as research and development (R&D). These functions are supported through the urban infrastructure and public science base, facilitating exchange of tacit knowledge. They also enjoy a low unemployment rate. However, the existing stock of human and physical capital in those regions with a high level of urban infrastructure does not lead to a high rate of economic growth. Our empirical analysis demonstrates that the rate of economic growth is determined by the accumulation of human and physical capital, not by level of their existing stocks. We found no significant effects of scale that would favour those regions with a larger stock of human capital. The primary policy implication of our study is that, in order to facilitate economic growth, education and training need to supply human capital at a faster pace than simply replenishing it as it disappears from the labour market. Given the significant impact of high-order human capital (such as business R&D staff in our case study) as well as the increasingly fast pace of technological change that makes human capital obsolete, a concerted effort needs to be made to facilitate its continuous development.

Technology transfer to China:a study of strategy in 20 EU industrial companies

Foreign direct investment has been important in China's economic development since the early 1980s. In recent years, the volume of inward FDI into China, according to some estimates, has been second only to that into the USA. The Chinese government has emphasised the need for FDI to be coupled with the transfer of more advanced technologies to China. For foreign companies, technology transfer raises the risk of losing their technology based competitive advantage to potential competitor firms. This risk may be exacerbated by insufficient legal protection of intellectual property rights in China. After briefly reviewing the development of Chinese official policy on technology transfer, this paper considers the strategy adopted by EU companies regarding the transfer of technology; in particular in advanced technology sectors. The research on which the paper is based included an analysis of information gathered from 20 leading EU companies with investments in China and operating in high-technology sectors. Information was gathered from senior company managers based in both China and Europe during the second half of 1998. The main findings include a measure of reluctance on the part of EU companies to transfer their core technologies to China and to base R&D capability there. At the same time, the companies appear aware that this policy may be unsustainable in the longer-term in the face of Chinese official policy and a desire to expand their operations in China. While they attempt to protect their existing technological knowledge, most of them accept that there will be technology "leakage" and therefore the most effective strategy is to maintain their technological lead through R&D.

Technology policy and technological innovation in the People's Republic of China

The objective of this research is to unveil the dynamics of technological innovation in planned economies in transition. It is proposed in the thesis that all innovation systems in the world, in fact, consist of certain configurations of market and hierarchy. These systems have always been shifting from one existing market-hierarchy mix to a new one, which is expected to be more conducive to technological innovation and economic development. Current reforms in many planned economies in transition reflect this theoretical proposition. A research framework is constructed to include three main dimensions for the study of a specific innovation system, i.e. Arrangements, Achievements and Actors. China, which has undergone reforms since 1978, is chosen as the empirical basis of the research. The research examined technology policy and technological innovation in China between 1978 to 1988. The thesis starts from Arrangements - R&D System in China and Its Reform. The thesis illustrates reforms in the R&D system in relation to government technology policy. There exist coherent government efforts to promote innovations through various plans, and the planning process incorporates both market and command elements. The institutional structure of Chinese R&D system remains still vertically departmentalised, but horizontal links are created through the market. Secondly, Achievements - Performance of Chinese R&D System is assessed through patterns of technological innovation. Data from National Awards for S&T Progress (1978-1988) are included in a substantial database, which is used to generate patterns of technological innovation and patterns of innovating organisations. These patterns were presented and interpreted in relation to geographical differences, sectoral differences, typological differences, forms of co-operation and the impacts of S&T policy and reform. The third dimension is study on Actors - Innovation in Applied R&D institutes. Through semi-structured interviews and questionnaire survey, internal structure and research management are analysed in the light of ongoing reforms. The reform of R&D funding system greatly affected the way applied R&D institutes operate. Both organisational and individual incentives for innovating are increasingly associated with economic or material benefits. The research suggests there is a need to put reforms in the R&D system into a wider societal and political context. Some general attributes of applied R&D institutes are also discussed in the thesis.

Regional competitiveness, economic growth and stages of development

This paper positions the concept of regional competitiveness within theories concerning regional economic growth and stages of economic development. It examines the sources of regional competitiveness encompassing an analysis based on the particular stage of economic development that the nations within which regions are situated have reached. As a means to achieve this, the paper undertakes an empirical analysis of data stemming from the World Competitiveness Index of Regions, and identifies regional competitiveness as a dual concept that explains relative differences in rates of economic development across regions, as well as an understanding of the future economic growth trajectories of regions at a similar stage of economic development. As with endogenous growth and development theory, the notion of regional competitiveness presented here places knowledge, innovation and entrepreneurship at the forefront of conceptualisations of regional economic differentiation.