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About this book

From the growth of a multi-billion-dollar high-technology corridor in Malaysia to conflict over housing development in Chicago, the practice of regional and local economic development around the world is both dynamic and diverse. Regional and Local Economic Development introduces the theory behind economic development and provides examples of successful, and less successful, practice.

This broad-ranging new text shows how government, private industry and individuals combine to achieve economic development. It examines the development of policies and practices in recent decades – such as eco-industrial parks, place marketing and social enterprises – and analyzes the ways in which contemporary regional economies are changing. It also summarizes the key academic debates and reviews the main concepts which inform policy-making. Truly global in scope, with case studies from over 30 countries, this book will be welcomed by students and practitioners alike.

Table of Contents

1. Introduction

Abstract
Standing on the Bund, as cargo boats ply to and fro, you look across the Huangpu River to Pudong, and are dazzled by the architectural extravaganza of Shanghai’s skyline (see Figure 1.1). The sheer dynamism of this global city’s economic development is evident all around. Construction of Pudong only began in 1990. Within a decade it became China’s financial centre. With over 15 million people, the rapidly growing Shanghai metropolis is the world’s fourth largest city. Starbucks, Pizza Hut and other global names jostle for lucrative sites where once the Red Guards paraded in the cause of Chairman Mao’s Cultural Revolution. There are huge shopping malls whose facades are faced with expensive granite. Above them prestigious office blocks dominate the skyline with an architectural flourish.
Cliff Hague, Euan Hague, Carrie Breitbach

2. Why and How Are Regional and Local Economies Changing?

Abstract
Economies have changed and are continuing to change. This is why there is now so much emphasis on regional and local economic development. For most of the world until the closing decades of the twentieth century, a region’s economic fate seemed to depend overwhelmingly on natural resources. Coal-mining towns grew on coalfields. Steel mills were built near iron-ore reserves or at places where vast quantities of coal and iron ore could be marshalled. Ports and shipbuilding grew around natural harbours. Market towns prospered serving their agricultural hinterlands. In the humid American south and in Europe’s African, Asian and South American colonies there were plantations. Productivity differences between locations, together with protectionist taxation policies against imported goods, sustained this global pattern of production well into the twentieth century.
Cliff Hague, Euan Hague, Carrie Breitbach

3. Place Competitiveness and Territorial Capital

Abstract
It is now commonplace to assert that cities and regions need to be competitive. For example, Gordon (1999: 1001) stated:
Cities compete in a variety of ways, across market areas of different extents, in conditions which may be more/less stable, and with or without the involvement of territorial agencies. Among the forms of competition, the most signifi cant involve rivalry within product markets, and that for inward investment, the attraction of desirable residents, and contests for funding or events from higher levels of government.
Cliff Hague, Euan Hague, Carrie Breitbach

4. Governance and Partnerships

Abstract
Chapter 1 made reference to the ‘New Institutional Economics’. It argued that many assumptions of neoclassical economics are idealizations that are not found in real-world situations. Thus, the political and legal framework is very important for the practice of economic development. The opening chapter also made the distinction between government and governance. The word ‘governance’ tries to capture the idea that governments work and negotiate with a range of other actors from the private sector and civil society, and the whole process spans different spatial scales. There were once clear distinctions between the different sectors, and governing was unambiguously the preserve of government; today the situation is more complicated.
Cliff Hague, Euan Hague, Carrie Breitbach

5. Land and Premises for Business

Abstract
Businesses need sites and premises to operate from, even if it is just a room in a house or a table at an internet café. This chapter is about land and commercial property as key requirements for most forms of business. Retailing is discussed later, in Chapter 10. There are some fundamental points to remember. First, land and buildings tend to be quite expensive items, and compete for investment with other areas of a business, e.g. with marketing or product development. Second, land and buildings are not easy to shift around or even alter as needs change. Thus a growing firm may well find that growth can only be achieved in new premises in a new location. Third, the environment around its premises may have impacts on the performance of the firm. If clients visit the premises, the look of the place, and the area around it, can influence their perception of the firm itself. How much this matters will depend on the type of firm it is: a canal-front site in a grim urban setting may add to the ‘edgy’ image of a graphic design company, but may not be the place for somebody making health-care products. In addition, some firms face absolute imperatives about the environment around them – for example they may depend on secure and high-quality supplies of water, or easy access to a highway. Last but not least, buildings will affect running costs through their energy efficiency. Concerns over carbon emissions make energy performance important.
Cliff Hague, Euan Hague, Carrie Breitbach

6. Infrastructure and Communications

Abstract
All businesses depend to some extent on infrastructure and communications. Transport is necessary to move raw materials, people and goods. Information technology is increasingly important in the age of teleworking, internet shopping and e-business. Although much of the infrastructure is literally out of sight, water and effective sanitation systems underpin urban economies. Thus infrastructure and communications provide an essential foundation for regional and local development. Infrastructure and communications are major sources of employment, both during construction and then in the operation of the systems. Although provision of gas, electricity and water was typically a municipal concern in the nineteenth century, in the decades that followed big business and state monopolies came increasingly to dominate such sectors. However, more recently we have seen the decentralization of infrastructure provision and infrastructure becoming an increasingly important aspect of local economic development (United Nations Centre for Human Settlements, 2001: 146).
Cliff Hague, Euan Hague, Carrie Breitbach

7. Economic Development and the Environment

Abstract
‘The bottom line of green is black.’ This snappy observation is the title of a book (Saunders and McGovern, 1993). It means that looking after the environment makes good business sense. Large companies are increasingly aware that a bad environmental record is likely to be reflected in consumer resistance to their products. But small businesses can also grow by using green business practices, and there are many opportunities for niche markets based on products that have authenticity and natural qualities. These insights contradict the traditional dichotomy between economy and environment. They underpin a key approach to economic development that was outlined in Chapter 1, eco-modernization. This chapter will explore that concept more fully and more critically, demonstrate its practice, and also point to the way that environmental concerns and opportunities have influenced other approaches to regional and local economic development.
Cliff Hague, Euan Hague, Carrie Breitbach

8. Support for Entrepreneurship and Business Development

Abstract
In most regional and local economies today businesses are the main contributors to economic growth. Furthermore, it is small, young and independent businesses that tend to grow at the fastest rates. However, such businesses are also the most vulnerable and likely to fail. People who start businesses and drive them forward are entrepreneurs. Therefore fostering and sustaining entrepreneurship is a key part of regional and local economic development.
Cliff Hague, Euan Hague, Carrie Breitbach

9. Housing and Housing Markets

Abstract
The housing industry – building, buying, selling or managing residential property, together with the equity tied up in housing – is likely to be a signifi cant part of a local economy. However, housing systems typically have a strong national imprint – forms of provision, design and construction, finance and regulation are typically strongly national in character. For example, Singapore has a history of public land acquisition using powerful legislation, and development of extensive areas of high-rise flats by the government’s Housing and Development Board. In contrast, in much of Latin America failures in state housing provision mean that housing policy largely takes the form of tolerating informal settlements developed on ‘illegally’ occupied land (Jenkins et al., 2007).
Cliff Hague, Euan Hague, Carrie Breitbach

10. Retailing, Food and Economic Development

Abstract
Retailing is a dynamic sector, yet it is often overlooked in approaches to regional and local economic development. As we saw in Chapters 2 and 5, for example, traditional regional development policy and practice concentrated on manufacturing jobs and provision of industrial premises. However, in the UK, retail generates about 8 per cent of national GDP and employs 11 per cent of the workforce (King Sturge/Business in the Community, 2006: 10). About 9 per cent of all registered businesses are retailers (British Retail Consortium, 2009). Similarly, the links between food and local economic development have not been fully grasped (Steel, 2008).
Cliff Hague, Euan Hague, Carrie Breitbach

11. Leisure, Culture and Tourism

Abstract
The possibility of the mass of the people having leisure time and enough disposable income and good health to enjoy it is relatively modern, and still by no means a global phenomenon. A classic sociological text was written (Veblen, 1912) that identified a ‘leisure class’ who were so defined because of their lack of engagement in useful employment. The rising affluence and changed working conditions of the decades that followed saw a modicum of leisure become recognized as something of a civil right. More recently it appears that the intensification of work has stimulated an intensification of leisure activity. There are still important differences between countries and classes in leisure time, but leisure, tourism and cultural industries have become entwined with the processes of globalization. They are increasingly important economic sectors. Zukin (1995: 1–2) put it succinctly: ‘With the disappearance of local manufacturing industries and periodic crises in government and finance, culture is more and more the business of cities – the basis of their tourist attractions and their unique, competitive edge’.
Cliff Hague, Euan Hague, Carrie Breitbach

12. Place Marketing

Abstract
As place competition has increased so also has place marketing and place branding. Some argue that the practice is not really new. Ward and Gold (1994: 2) showed that seaside resorts have a long history of producing posters and pamphlets advertising their ‘golden sands, invigorating climates … [and] welcoming hotels’. In the USA there is a long tradition of promoting towns. The activity gave rise to a new word, ‘boosterism’. It was typically led by a local business grouping, which subsequently added support from other quarters to create a ‘growth coalition’ (Logan and Molotch, 1987: 62). Meanwhile, in the UK in the 1960s, the old industrial city of Newcastle-upon-Tyne began to project itself as ‘the New Brasilia’ and ‘The Milan of the North’, as it embarked on a major programme of comprehensive redevelopment. In general, though, the promotional aspect of regional and local economic development in those days was concentrated on advertising the land and property aspects of a place, its industrial estates and access to the highway network. It has become more sophisticated and widespread.
Cliff Hague, Euan Hague, Carrie Breitbach

13. Skills for Regional and Local Economic Development

Abstract
This chapter retains the focus on policy and practice, but from a different angle. The previous chapters have presented many short examples of practices from many different places. To complement that breadth this chapter looks in more depth at the story of Pilsen, one neighbourhood in Chicago. In this way, the context and interconnectedness of a series of local economic development interventions can be analysed. The focus on Pilsen is then used in the second part of the chapter to highlight skills that can be used in regional and local economic development work. Skills are acquired during a career, though they may not be written down and reflected upon. Egan et al. (2004) argued that there are generic skills – skills that cut across traditional professional boundaries and are needed in a wide range of place development tasks. Similarly, Hague et al. (2006: 10) argued that ‘Skills such as creativity, a capacity to challenge assumptions and grasp the big picture, and governance skills such as communication and negotiation may not be entirely new. What is different is that today they are essential’.
Cliff Hague, Euan Hague, Carrie Breitbach

14. Conclusions

Abstract
Previous chapters have demonstrated that there is a wide array of practices within the field of regional and local economic development. For much of the twentieth century regional development was mainly about provision of advanced factories for manufacturing companies, and the idea of local economic development scarcely existed. Today the scope, and also the diversity of actions is much greater. Chapter 1 proposed a typology to put some order on what otherwise could be a bewildering and arbitrary list of different things done in different places. The typology was structured around two simple questions. These concerned the degree of priority given to market efficiency as against social or environmental priorities, and secondly, the question of whether market processes were seen as delivering the kind of development that is wanted. From these combinations four approaches to regional and local economic development were hypothesized: pro-business competition to attract inward investment; sector targeting and area regeneration; eco-modernization, and finally, pro-poor local economic development.
Cliff Hague, Euan Hague, Carrie Breitbach
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