chapter  1
10 Pages

Regional Competitiveness: An Elusive yet Key Concept?

INTRODUCTION established a European Council of Competitiveness, and it undertook to produce a regular CompetitivenessThere is now widespread agreement that we are witReport on the performance of the economy of thenessing the ‘resurgence’ of regions as key loci in the European Union (the most recent being the seventh,organization and governance of economic growth and for 2003). In the European Union, the issue of com-wealth creation. A previous special issue of this journal petitiveness has taken on particular significance in rela-(‘Rethinking the Regions’, Regional Studies (2003) tion to its Lisbon ‘growth strategy’, with its highly37(6/7)) was devoted to recent developments and ambitious aim to close the ‘competitiveness gap’ withdebates in regional development theory. The present the USA and to become the world’s most dynamicspecial issue on ‘Regional Competitiveness’ is intended and competitive knowledge-based economy by complement that earlier collection of papers by In addition, numerous private organizations and con-focusing on what has become one of the most discussed sultancies concerned with measuring and lobbying theaspects of the new concern with regions, namely cause of competitiveness have emerged recently, suchtheir competitive performance. The competitiveness of as the World Economic Forum (Geneva, Switzerland),regions is an issue not just of academic interest and the Competitiveness Institute (Barcelona, Spain), thedebate, but also of increasing policy deliberation and Council on Competitiveness (Washington, DC, USA)action. However, as the papers in this issue make clear, and the Institute for Strategy and Competitivenessthe very notion of regional competitiveness is itself (Harvard, MA, USA).complex and contentious, and even though policy-

This focus on competitiveness has not just been amakers everywhere have jumped onto the regional and macroeconomic phenomenon, however. It has alsourban competitiveness bandwagon, we are far from a assumed key significance at the regional, urban andconsensus on what is meant by the term and how it local scales. Within governmental circles, interest hascan be measured: as is often the case, policy has grown in the ‘competitive performance’ of individualraced ahead of conceptual understanding and empirical regions and cities, with identifying the key determi-analysis. The papers included in this issue are intended nants of regional and urban competitiveness, and withto advance that understanding and analysis. The purdevising policies to promote and foster those determi-pose of this extended Editorial introduction is to nants. In the UK, for example, the improvement ofprovide some of the background to this project. regional and urban competitiveness has moved to central stage in the policy statements of the Treasury,

THE COMPETITIVENESS FAD Department of Trade and Industry, and the Office of the Deputy Prime Minister (DTI, 2004; H. M.The credo of competitiveness has attracted a veritable Treasury, 2001, 2003, 2004; ODPM, 2003, 2004).host of believers and followers. Economists and experts Likewise, the European Commission (2004)everywhere have elevated ‘competitiveness’ to the status sees the improvement of competitiveness in Europe’sof a natural law of the modern capitalist economy. lagging regions as vital to ‘social cohesion’. At theTo assess a country’s competitiveness and to devise same time, city and regional authorities are themselvespolicies to enhance it have become officially institutionincreasingly obsessed with constructing local competi-alized tasks in many nations, e.g. the USA, the UK, tiveness indices so as to compare the relative standingBelgium, Italy, the Netherlands and Japan. The USA of their localities with that of others, and with devisingled the way in the early 1990s by setting up a governpolicy strategies to move their area up the ‘competi-mental Competitiveness Policy Council to report regutiveness league table’. Thus, in the same way thatlarly on and to promote the competitiveness of the US

economy. In the same year, the European Commission the World Economic Forum produces annual global

RON MARTIN , MICHAEL KITSON* and PETER TYLER‡† and ‡Department of Land Economy, University of Cambridge,* Judge Institute of Management, †Department of Geography

competitiveness indices that rank national economies, measure of regional competitiveness is problematic. First, it uses a concept of competitiveness definedso a plethora of city and regional indices have appeared

that rank places on the basis of this or that measure of originally for national economies without questioning whether this is the most useful or meaningful conceptcompetitiveness. The Progressive Policy Institute in

Washington, DC, for example, compiles various ‘new for use at the sub-national (urban and regional) scale. Second, as a consequence, it carries over all the prob-economy’ indices for US cities and regions (Atkin-

son and Coduri , 2002; Atkinson and Wilhelm , lems and debates that surround the notion of national competitiveness as defined in trade and export terms.2002). Robert Huggins Associates (2004a, b)

produces the World Knowledge Competitiveness Index For even at the national level, there is considerable disagreement over the idea of competitivenessthat seeks to benchmark the globe’s leading knowledge

economy regions; it also produces a European (Cellini and Soci , 2002). As Krugman (1996a, b) and others (e.g. Group of Lisbon, 1995) haveCompetitiveness Index that ranks cities and regions.