eWork and Regional Development: Background

Regional competitiveness and geographic polarisation

Much work has been done in an attempt to understand the concept of regional competitiveness. This is more than the competitiveness of individual businesses or sectors in a given region, as it also focuses on the synergies and complementarities between these individual activities within a regional context. A territory’s indigenous capacity for development is linked to the productivity of enterprises, their ability to join networks, the skills of the labour force and the strength of institutional resources. Also important is the need to create networks, partnerships and co-operation within the region which foster collective prosperity (Millard, 2002b).

The OECD in 2001 (OECD, 2001) introduced the concept of the learning region as a framework for analysing key relationships and developing effective strategies for regional policy. At base, economic competitiveness at the regional level is determined by the quality of social capital, defined as the institutions, relationships, and social norms impinging upon the quality and quantity of social interactions within a society. In a broad sense it includes the social and political framework that shapes both these norms but also the relevant social structures. Social capital, in turn, moulds the types of learning, the use of knowledge and the ability to innovate (ie create new knowledge) resulting in economic competitiveness, but also in social inclusion if long term sustainability is to be ensured. See the following diagram.

The learning region model

learning region model

(Source: OECD, 2001)

Two categories of learning are recognised as important in this process: individual and organisational. Each has specific characteristics for disseminating existing knowledge and creating new knowledge, but the types of interaction between the two are also important. The necessary interaction between individuals and organisations, leading to the ability to innovate and become competitive is much more likely to occur in regions with high physical densities of skills and specialised firms.

Regional competitiveness thus depends increasingly on knowledge and innovation, and the importance of territorial complexes of ‘milieux of innovation’ is at the heart of the ability of cities, and particularly of large cities, to become the sources of wealth in the knowledge economy. These trends can also have a downside, however, for example when large metropolises, whilst becoming bound more tightly together on a global scale through high speed electronic networks, become disconnected from their local hinterlands leading to the splintering of physical networks and communities and increasing geographic polarisation. In the worst cases this can lead to social and geographic polarisation, and what is also called the digital divide (Castells, 1996 and Graham and Marvin, 2001).

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