Editorial
Special Issue on Regional Economic Development
International Regional Science Review 36(3) 263-266 ª 2013 SAGE Publications Reprints and permission: sagepub.com/journalsPermissions.nav DOI: 10.1177/0160017613485243 irsr.sagepub.com
Alessandra Faggian1, Elizabeth Mack2, and Heather Stephens3 An irony of globalization is that its impact is felt most on regional rather than national economies. Over the last few decades, it has been widely recognized that competitiveness is regionally rather than nationally based, and policies designed to enhance competitiveness should be regional rather than national in scope (Scott and Storper 2003). However, research and policy agendas at this scale are challenging because they require tailored local and regional strategies that demonstrate an understanding of the unique role and impact of cities and regions on global economic trends. Researchers and policy makers are responding to this challenge by approaching development questions from an explicitly regional perspective. This special issue of the International Regional Science Review is comprised of six articles that evaluate issues critical to the growth and development of competitive regions. These articles address a variety of interrelated regional issues ranging from human and social capital, to technological change, to place-based policies and innovation policies. The first article in this special issue, by Betz and Partridge (2013), examines the role that job creation plays in driving migration between regions. Place-based economic development policies that aim to create new jobs have been touted as helping the original residents of a region. However, if outsiders migrate into the region to take the new jobs, then the original residents will not benefit. Using data for net migration between pairs of US counties, they compare the results for Appalachia, a peripheral, lagging region, with the rest of the United States. They find that, over time, net migration is becoming less responsive to employment growth, and this is
1
The Ohio State University, Columbus, OH, USA Arizona State University, Tempe, AZ, USA 3 California State University, Long Beach, CA, USA 2
Corresponding Author: Alessandra Faggian, The Ohio State University, 2120 Fyffe Road, Columbus, OH 43210, USA. Email:
[email protected]
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even more pronounced in Appalachia. At the same time, employment growth attracts wealthier migrants in the broader US sample, but is not associated with higher net income per migrant in Appalachia. These results suggest that place-based policies may be effective in creating opportunities for the original residents of regions, especially in Appalachia. For lagging regions, this provides hope that policies can be effective in increasing economic vitality and reducing poverty. In the second article, Fazio and Lavecchia (2013) seek to understand the diffusion of social capital, a factor that has been linked to economic growth (Putnam 1993; Banfield 1958; and others). Social capital is measured using ‘‘generalized trust’’ which captures how trusting people are to other members of society (and not just people they already know). This measure is used because it is critical to market functioning and economic growth (Guiso, Sapienza, and Zingales 2004). Using two spatial exploratory data methods, the article assesses the distribution of trust in European regions across regions and time. It also considers the effect of surrounding regions and within country institutions and attitudes. The article finds that social capital levels are highly persistent and affected by both attitudes in neighboring regions and formal institutions. This suggests that policies to change social capital and attitudes may be ineffective. However, policy making can benefit from understanding the social attitudes of a region and creating policies that take these into account. As evidenced by the ongoing global economic restructuring, technological growth can have both positive and negative effects on employment. Capello and Lenzi (2013) use data for European nomenclature of territorial units for statistics regions to examine the separate effects on employment growth from product and process innovations. Their results highlight the fact that regional characteristics matter in terms of employment growth. For example, in those regions with high levels of employment in goods producing industries, product innovations have a positive impact on employment growth, while such innovations are insignificant for the broader set of regions. Similarly, for large cities, process innovations lead to employment declines, while for the broader set of regions, process innovations do not have a statistically significant impact on job growth. This is consistent with a story that cities have more service industries which produce more process innovations. Whether or not innovation leads to job growth depends on the economic structure of a region and this analysis suggests our policies must take that into account. A wealth of articles has examined the relationship between human capital and economic growth. Traditionally, the focus has been on using education as a measure of human capital. However, in recent years, Florida (2002) and others have argued that creativity is really the driver of growth. In the next article, Marrocu and Paci (2013) seek to disentangle the education component of human capital from that related to creativity by using three nonoverlapping measures of human capital: creative graduates, Bohemians, and noncreative graduates. They then use these human capital measures to assess what drives labor productivity growth for 257 European regions
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between 2002 and 2007. They find the strongest relationship between creative graduates and growth, followed by noncreative graduates. At the same time, the Bohemians (creative individuals without degrees) appear to have almost no impact on regional development. Their results suggest that simply having an educated workforce is not enough to enhance the productivity of a region. The region must have diversified occupations and education in order to benefit from the creative graduate effect. If human capital is important to economic growth, it has become more so as the global economy has evolved toward a 24-hr knowledge-based economy. In order to compete in this new economy, businesses and regions need access to increasingly higher speed broadband Internet. However, to date, most of the policy focus has been on gaining access to broadband, without considering productivity and human capital effects. To address this, Mack and Faggian (2013) consider the role that access to broadband Internet technology has on productivity—measured by earnings—for more than 3,000 US counties. To account for the spatial correlation of earnings between nearby counties, they use a spatial lag model. They also allow the effect of broadband to vary based on the level of human capital. Their results suggest that broadband only affects productivity in the presence of high levels of human capital. This is consistent with a story that you have to have the skills to benefit from the new technology and that technology can actually be a substitute for lower skilled workers. Thus, policies that promote access to broadband Internet for disadvantaged areas may work best when coupled with policies that make people more competitive as well. Improving economic prospects for regions requires effective public policies. In the final article, McCann and Ortega-Argile´s (2013) examine changes in regional development policies with an emphasis on European Union Cohesion Policy. While these policies depend on the changing dynamics within the European Union, they also reflect global economic shifts and shifts in regional development policy focused on outcomes and institutional incentives. The new policy includes integrated placebased approaches that focus on promoting innovation, sustaining the environment, and addressing inequality. Importantly, the new policy also reflects a new understanding, as highlighted in the other articles in this issue, of developing policies that take into account the unique nature of different regions and localities. In acknowledging that research on regional development is much more complex than what is covered by the six articles included in this special issue, we hope—as guest editors—that these contributions have provided some new useful insights that can be explored further in the future in an ongoing, united effort to grapple with the impacts of globalization on regional economies. Acknowledgments The articles featuring in this special issue were presented in a series of sessions at the 58th Annual Meeting of the North American Regional Science Association International in Miami, Florida, in November 2011. We would like to thank the organizers of the conference for helping us with these highly engaging sessions. A special thanks goes to the authors whose work we are highlighting for producing such fine contributions to the special issue.
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References Banfield, E. C. 1958. The Moral Basis of a Backward Society. New York, NY: Free Press. Betz, M. R. and M. D. Partridge. 2013. ‘‘Country Road Take Me Home: Migration Patterns in Appalachian America and Place-based Policy.’’ International Regional Science Review 36: 267–95. Capello, R. and C. Lenzi. 2013. ‘‘Innovation and Employment Dynamics in European Regions.’’ International Regional Science Review 36:322–53. Fazio, G. and L. Lavecchia. 2013. ‘‘Social Capital Formation across Space: Proximity and Trust in European Regions.’’ International Regional Science Review 36:296–321. Florida, R. 2002. The Rise of the Creative Class and How It’s Transforming Work, Leisure, Community, and Everyday Life. New York, NY: Basic Books. Guiso, L., P. Sapienza, and L. Zingales. 2004. ‘‘The Role of Social Capital in Financial Development.’’ American Economic Review 94:526–46. Mack, E. and A. Faggian. 2013. ‘‘Productivity and Broadband: The Human Factor.’’ International Regional Science Review 36:392–423. Marrow, E. and R. Paci. 2013. ‘‘Regional Development and Creativity.’’ International Regional Science Review 36:354–91. McCann, P. and R. Ortega-Argile´s. 2013. ‘‘Redesigning and Reforming European Regional Policy: The Reasons, the Logic, and the Outcomes.’’ International Regional Science Review 36:424–45. Putnam, R. D. 1993. Making Democracy Work. Princeton, NJ: Princeton University Press. Scott, A., and M. Storper. 2003. ‘‘Regions, Globalization, Development.’’ Regional Studies 37:549–78.
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