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.

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.

Industrial districts, inward foreign investment and regional development

This article compares the importance of agglomerations of local firms, and inward FDI as drivers of regional development. The empirical analysis exploits a unique panel dataset of the Italian manufacturing sector at the regional and industry levels. We explore whether FDI and firm agglomeration can be drivers of total factor productivity (separately and jointly), with this effect being robust to different estimators, and different assumptions about inter-regional effects. In particular, we isolate one form of firm agglomeration that is especially relevant in the Italian context, industrial districts, in order to ascertain their impact on productivity. In so doing, we distinguish standard agglomeration and localization economies from industrial districts to understand what additional impact the latter has on standard agglomeration effects. Interaction effects between FDI spillovers and different types of agglomeration economies shed some light on the heterogeneity of regional development patterns as well as on the opportunity to fine tune policy measures to specific regional contexts.

Hymer and uneven development revisited:Foreign Direct Investment and regional inequalities

Picking up on one of Hymer's key contributions, this paper examines the impact that inward foreign direct investment (FDI) into the UK has on the patterns of development, both within and across regions. Using a panel of data for the manufacturing sector, the paper illustrates that even where one isolates the effect on the domestic sector alone, inward investment acts to increase the demand for skilled, relative to unskilled labour, and also generates the expected agglomeration effects in terms of the demand for capital investment. The paper then goes on to draw certain policy comparisons between these findings and the desired aim of attracting FDI, notably to increase demand for labour in those regions suffering structural unemployment, and secondly to reduce the disparities between regions.

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.

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.

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.

Small and medium-sized enterprises and regional economic growth in Brazil

This paper examines the relationship between the small and medium-sized enterprise (SME) sector and economic growth for an annual panel of Brazilian states for the period 1985–2004. We investigate the importance of the relative size of the SME sector measured by the share of SME employment in total formal employment and the level of human capital in SMEs measured by the average years of schooling of SME employees. The empirical results indicate that the relative importance of SMEs is negatively correlated with economic growth, a result that is consistent with previous studies examining developing countries. In addition, our results show that the human capital embodied in SMEs may be more important for economic growth than the relative size of the SME sector.

The global competitiveness of regions

The aim of this book is to consider theoretically the notion of the global competitiveness of regions, as well as giving attention as to how such competitiveness may be empirically measured. With this in mind, the book has three specific objectives: first, to place the concept of regional competitiveness within the context of regional economic development theory; second, to present a rationale and method for quantifying the global competitiveness of regions; and, third, to undertake the most geographically widespread analysis of regional competitiveness differences across the globe. With regard to the third goal, the analysis incorporates more than 500 regions across Europe, North and South America, Asia-Pacific, the Middle East, and the so-called BRIC economies of Brazil, Russia, India, and China. The importance of the concept of competitiveness has increased rapidly in recent years, with the issues surrounding it becoming, at the same time, more empirically refined and theoretically complex. The focus on regions reflects the growing consensus that they are the primary spatial units that compete to attract investment, and it is at the regional level that knowledge is circulated and transferred, resulting in agglomerations, or clusters, of industrial and service sector enterprises. This growing acknowledgement of the region’s role as a key spatial unit of organisation has led to attention turning to competitiveness at a more regional level. The book explores the results of the World Competitiveness Index of Regions (WCIR), covering the rankings and results of the 2014 edition. The WCIR provides a tool for analysing the development of a range of regional economies across the globe. It enables an illustration of the changing patterns of regional competitiveness on the international stage to be generated. In fundamental terms, the WCIR aims to produce an integrated and overall benchmark of the knowledge capacity, capability, and sustainability of each region, and the extent to which this knowledge is translated into economic value and transferred into the wealth of the citizens of each region.

From co-operative to competitive localism? The changing balance between equity and efficiency in local government under the Conservative / Liberal Democrat coalition

This paper considers whether there has been a shift in the balance between equity and efficiency in respect of decentralised public policy in England since the election of the Conservative / Liberal Democrat coalition in 2010. Drawing on the literature on policy decentralisation and fiscal federalism from both Political Science and Economics, reasons are discussed why a trade-off between equity and efficiency might be expected. The context of English local government then outlined, and consideration is then given to four areas of policy: business rate localisation, the ‘New Homes Bonus’, council tax benefit and social housing, and regional economic development. In each case, some shift in the balance away from concern with equity towards one with efficiency is discerned: whether or not this is desirable will prove a matter of political and moral, as well as scientific judgement.