Edited by Koen Frenken
Chapter 10: Diversity, Stability and Regional Growth in the United States, 1975–2002
Jürgen Essletzbichler* 1. INTRODUCTION Recent years have witnessed important changes in economic governance systems represented as a scalar shift of economic and political power from national states to supra-national entities and subnational entities such as cities and regions (Jessop, 1990, 1994; Brenner, 1998, 2004; Scott, 1998). Cities, regions and city-regions are increasingly forced into direct competition with each other that prompts regional policy makers to actively design and shape regional economic development (Harvey, 1989; Leitner and Sheppard, 1998). Baden-Württemberg, the Third Italy and Silicon Valley exemplify the paradigmatic model of economic development that other regions attempt to emulate (Bartik, 1996). Regional policies are designed to attract clusters of functionally related industries with high growth potential although the value of cluster-based policies is not uncontested (Hudson, 1999; Lovering, 1999; Begg, 2002; Martin and Sunley, 2003; Boschma, 2004; Kitson et al., 2004). Duranton and Puga (2000: 533) caution that many of these policies seem to ‘lack a clear rationale or even to be based on common misconceptions’. The value of industrial specialization for regional economic development is uncertain as theoretical and empirical work on specialization and diversity of cities suggests (Baldwin et al., 2003; Black and Henderson, 2003; Duranton and Puga, 2000, 2001; Feldman and Audretsch, 1999; Henderson, 1997; Henderson et al., 1995). In particular, there appears to be a trade-oﬀ between growth and stability of regional economies that is largely ignored by policy makers (Baldwin and Brown, 2004). This chapter examines the relationship among diversity, growth and stability of...
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