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Regional push and pull factors

The regional (or locational) characteristics of both source and destination regions are often described as so-called regional ‘push’ factors (ie factors tending to push a function away from the source region) and regional ‘pull’ factors (ie factors pulling towards the destination region) (Huws, O’Regan, 2001).

Regional push factors: factors pushing away from source regions. These include:

• personnel shortages

• labour market bottlenecks

• high staff turnover

• high costs which need to be reduced

• the need to be close to remote customers

• the need for organisational change not possible in the present location

Regional pull factors: factors pulling towards destination regions. The EMERGENCE study of the most important destinations for eWork suggests a clustering effect whereby some regions are able to build a critical mass on their past reputation for excellence in a given field by attracting further talent and investment, which in turn feeds a continuing cycle of growth. Overall, by far the most important selling point is the availability of technical expertise. Next comes low cost, which is followed by a good reputation and then by reliability or high quality. In more detail, it is useful to distinguish between those factors tending to lead to geographic concentration and those tending to lead to geographic decentralisation:

• potentially important in geographic concentration relocations (eg within large cities):
  • special skills and expertise (especially high level tacit skills)

  • potential for achieving overall lower costs in one concentrated location than in several dispersed source regions, such as:
    • economies of scale making it possible to spread fixed costs (such as IT support, training, administration, infrastructure, etc.), plus synergy effects

    • more efficient use of resources

    • better and cheaper infrastructures (eg ICT, transport, etc.)

    • presence of training, research institutes, etc.

    • reducing the need for personnel

    • potentially important in geographic decentralisation relocations (eg to smaller urban areas, rural and peripheral regions):

  • cheaper labour (eg the urban-rural wage differential)

  • labour surplus

  • labour stability (eg lower labour turnover)

  • special skills and expertise (especially lower level explicit, codified skills)

  • government policy and regulations, tax concessions, subsidies, incentives, etc.

  • favourable time zone (normally only important in the case of inter-continental relocations)

  • a particular market which needs to be served by a local presence (eg because of language, culture, competitive imperative, etc.)

  • personal preference, eg life style, quality of life, culture, region of origin, etc.

The EMERGENCE results showed that several of the above were largely insignificant as pull factors in practice, ie the availability of government grants or other state incentives to choose a location; the time zone in which the region is located; and low staff turnover. (See eWork relocation by reason and business function) (Flecker and Kirschenhofer, 2002).

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© 2002, Institute for Employment Studies