Transcript Modelling economic development in the European Ultra

Modelling economic development in the
European Ultra-periphery
Diane Perrons
Department of Geography and Environment and
Gender Institute LSE
[email protected]
Modelling economic development in the European
Ultra-periphery
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The ultra peripheral regions in the global context
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Criteria for a useful ‘scientific’ model
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Contributions from ‘economic geography’
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Value chain perspective - strengths and limitations
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Measures of Regional GDP and Regional well being
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Gender mainstreaming and regional analysis
Modelling regional development
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Convergence – neo-liberalism
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Divergence
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economic geography – clustering perspectives
development studies – value chain analysis
Divergence – clustering (1)– quantitative perspective:
clusters depend on the balance between centripetal and
centrifugal forces (Krugman 1998)
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centripetal forcescumulative growth and
clustering
market size – linkagesexternal economies of
scale
thick labour markets
low/medium transport
costs
pure external economies
(e.g. knowledge spillovers)
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centrifugal forcesdispersion
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immobile factors
(e.g.labour)/land rents
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high transport costs
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pure external diseconomies
(e.g. congestion)
Divergence – clustering (2): clusters depend on the
balance between externalities and spatially dependent
transaction costs (adapted from Scott 1998)
Externalities
Spatially dependent transaction costs
Uniformly
low
heterogeneous
Uniformly high
Low
1. spatial
entropy
2.random
dispersal and
emerging
hierarchical
landscapes
3. hierarchical
landscape - small
market centres –
dispersed activity
High
4.small
interconnect
ed clusters
5. super clusters
6. small
disconnected
clusters
Value chains and regional analysis
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Value chains focus on cross border links and map:
the input output structure,
 the territorial structure, and
 the governance structure
of commodities from production to sale.
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Analyses
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the mode of integration of different production units,
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and
identifies the differential shares of value appropriated at different stages
Provides an analytical link between local regional
development and the wider national/ global context
Governance structure and capacity for upgrading (Adapted from
Schmitz 2004)
Governance structure
Capacity for Upgrading
Arm’s length market relations
Competition in the open market -
Upgrading depends on the firms
own capacity, local context and
assistance from local authorities
Networks
– firms linked by complementary
competences
Horizontal or reciprocal
relations between firms who
coordinate their requirements through sharing
information.
Upgrading most likely as local firms
already sophisticated.
Quasi hierarchy – asymmetry of
power in favour of lead firm
Hierarchy – vertical integration
Lead firm exercises control
through the supply chain in order to ensure
product standards and delivery performance,
may give assistance to local firm to meet
targets but may impede functional upgrading
Lead firm owns of some operations in the chain.
Upgrading largely determined
by preferences of lead firm
Regional development, economic and social well
being GDP or regional well being – see (Dunford 1996)
GDP
GDP
EmployPop

*
Re sPop EmployPop Re sPop
Regional productivity and employment (nuts 1) (2003)
Regional productivity and employment
(nuts 2) (2003)
Gender mainstreaming in regional
theorising?
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"Equality between men and women is one of the
EU’s fundamental objectives, and we have a
responsibility to see that it is taken into account
in the area of regional policy, which accounts for one
third of the EU budget and is one of the most visible policies for
citizens. Gender mainstreaming is also part of the Lisbon strategy,
because gender discrimination, both overt and latent, equates to
a great waste of human resources. Eliminating discrimination will
lead to gains in both employment and productivity."Danuta
Hübner (2005) , European Commissioner for
regional policy,
http://ec.europa.eu/employment_social/news/2005/may/gender_en.html
circular flow of (a) incomes (b)
output of goods and services
Incomes (y)
Marketed goods
and services
G
T
Households
S
Government
H
Firms
Household
Sector
Consumption C
X
I
Public
Sector
PS
D
Provisioning
values, labour
services
Private
Sector
PS
Conclusion
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Linking the cluster approach with value chain analysis
helps to identify patterns of economic activity that would
enhance regional GDP and regional employment.
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Research could also be devoted to developing broader
models of economic and social well being by adapting
some of the measures used by the UNDP in its work on
the human development index and by feminist
economists with respect to a more holistic understanding
of the economy to the regional level.