Networks, Space and Competitiveness

Networks, Space and Competitiveness

Evolving Challenges for Sustainable Growth

Edited by Roberta Capello and Tomaz Ponce Dentinho

The expert contributors illustrate that sources of regional competitiveness are strongly linked with spatially observable yet increasingly flexible realities, and include building advanced and efficient transport, communications and energy networks, changing urban and rural landscapes, and creating strategic and forward-looking competitiveness policies. They investigate long-term interactions between regional competitiveness and urban mobility, as well as the connections that link global sustainability with local technological and institutional innovations, and the intrinsic diversity of spatially rooted innovation processes. A prospective analysis on networks and innovation infrastructure is presented, global environmental issues such as climate change and energy are explored, and new policy perspectives – relevant world-wide – are prescribed.

Evolving networks, spaces and competitiveness policies: introductory remarks

Capello Roberta and Tomaz Ponce Dentinho

Subjects: economics and finance, regional economics, urban and regional studies, regional economics

Extract

In a period of increasing globalization and of rapid rise of emerging countries, the identification of the sources of regional competitiveness is of paramount importance. This aspect becomes even more important if one accepts the idea that regions compete on the basis of absolute rather than comparative advantage (Camagni, 2002). A Smithian ‘absolute advantage’ principle – similar in nature to Porter’s concept of ‘competitive advantage’ (Porter, 1990) – is what lies behind regional economic growth. This statement comes from the observation that the two ‘classical’ equilibrating processes of a comparative advantage rule à la Ricardo do not work properly or do not exist at the regional level: the first process relies on downward flexibility of prices and wages, which is widely hampered by the existence of national wage contracts in both private and public structures and by the homogeneity of import prices (recall that regions are very open economies); the second, ‘modern’, process relies on the devaluation of the currency, and it is automatically excluded in an interregional context. The Ricardian conclusion that each country will always be granted some specialization and role in the interregional division of labour is not valid for regions. A region may well be pushed ‘out of business’ if the efficiency and competitiveness of all its sectors is lower than that of other regions, and its fate is, in this case, mass unemployment and, in the case of insufficient public income transfers, emigration and possible depopulation. With regard to this possible scenario, paying close attention to the way a local economy can construct regional advantage is of paramount importance.

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