Peter Sunley

Paul Krugman's Geographical Economics and Its Implications for Regional Development Theory: A Critical Assessment*

AbstractEconomists, it seems, are discovering geography. Over the past decade, a “new trade theory” and “new economics of competitive advantage” have emerged which, among other things, assign a key importance to the role that the internal geography of a nation may play in determining the trading performance of that nations industries. Paul Krugmans work, in particular, has been very influential in promoting this view. According to Krugman, in a world of imperfect competition, international trade is driven as much by increasing returns and external economies as by comparative advantage. Furthermore, these external economies are more likely to be realized at the local and regional scale than at the national or international level. To understand trade, therefore, Krugman argues that it is necessary to understand the processes leading to the local and regional concentration of production. To this end he draws on a range of geographical ideas, from Marshallian agglomeration economies, through traditional loc...

Relational economic geography: a partial understanding or a new paradigm?

Abstract Relational approaches in economic geography have grown in popularity and influence, but have not been critically evaluated or discussed. This article argues that poststructural and network-based versions of relational economic geography undoubtedly open up new research issues and provide tools for certain purposes, but questions whether they provide a coherent research agenda and new theoretical paradigm that can guide the reconceptualization of economic geography. The article addresses two main cases for a relational approach: its correspondence with a knowledge and network-based capitalism and the claim that it provides an improved philosophy and ontology. It finds problems with both cases and argues that the approach provides an imprecise and selective ontology that is preoccupied with microscale processes. As a result, relational economic geography does not lend itself to causal explanations and schemas, is incapable of discriminating among different economic theories, and could become immune to empirical evaluation. In many cases, it seems to disregard many of the valuable insights of institutionalist and critical realist approaches, including the implications of emergence. The article concludes that instead of searching for a microlevel relational perspective or a new vocabulary, economic geography’s analysis of connections and relations would be better set within an evolutionary and historical institutionalism that understands economic relations as forms of institutional rules and practices and does not privilege ties and networks over nodes and agents.

Spatial Proximity Effects and Regional Equity Gaps in the Venture Capital Market: Evidence from Germany and the United Kingdom

The issue of ‘equity gaps’ has loomed large in recent discussions of enterprise formation and development, both in the United Kingdom and in Germany. One particularly intriguing, but highly elusive, aspect of this issue is the question of whether equity gaps have a regional dimension: are certain regions at a systematic disadvantage with respect to the provision of equity capital? In this paper, we explore this question in the context of the UK and German venture capital industries, drawing both on unpublished industry data and on information obtained from original surveys of venture capital firms in the two countries. We report clear evidence that the venture industries in both countries are spatially constituted. Despite important national differences, venture capital firms tend to be concentrated in identifiable clusters and their investment outcomes show clear evidence of spatial proximity effects; investment is disproportionately concentrated in those regions that also contain the major clusters of venture capital firms. However, how far this spatial form produces regional equity gaps is hard to determine. Venture capitalists themselves argue that they do not intentionally discriminate between regions in their decisionmaking, and many acknowledge the existence of funding and deal-size gaps but not regional gaps per se. But their perception of project risk is, nevertheless, regionally sensitive. We argue that the notion of a simple supply gap overlooks the way in which the localised form of the industry is based on a dynamic learning process in which demand and supply processes combine with their embeddedness in social networks and individual perceptions in a mutually reinforcing way. Less-favoured regions, with low investment rates, few local venture capital firms, and a dearth of experienced specialist intermediaries, may thus be trapped in a situation of both depressed demand for and supply of venture capital investment.

Venture capital programmes in the UK and Germany: In what sense regional policies?

Sunley P., Klagge B., Berndt C. and Martin R. (2005) Venture capital programmes in the UK and Germany: in what sense regional policies?, Regional Studies 39 , 255–273. The paper considers how far and in what ways venture capital policies in the UK and Germany have been constructed as regional policy interventions. It begins by explaining two justifications for adding a regional dimension to venture capital policy and outlines the development of such policy in the two states. It explains the contrasting policy regimes and the means of intervention employed. Despite their marked differences, venture capital policies in both states are regionalized to only a limited degree. However, the uneven regional operations and effects of such policies are likely to produce an unintended regionalization of outcomes that may contradict the aims of closing regional disparities in risk finance and entrepreneurialism.

DESIGN SPACES: AGGLOMERATION AND CREATIVITY IN BRITISH DESIGN AGENCIES

Abstract. Although there is a growing body of research into the cultural and creative industries, little work has focused specifically upon on the geography of design and its role in regional economies. The relative neglect of the geography of the UK design industry is surprising given recent assertions about the sectors role in national economic competitiveness; its contribution to product innovation; and its importance as an urban regeneration resource. This paper explicitly considers the extent to which existing conceptualizations of agglomeration and creativity provide insights into the realm of design. Our discussion reflects upon recent surveys of the design sector and analyses current design organization membership data, both of which reveal an overwhelming concentration of design activities in London and the South East. Our analysis of the strategies, organization and practices of agencies in London reveals that a number of the key features associated with cultural industries in general are significantly less discernible within design.

How Regions React to Recessions: Resilience and the Role of Economic Structure

Martin R., Sunley P., Gardiner B. and Tyler P. How regions react to recessions: resilience and the role of economic structure, Regional Studies. This paper examines how employment in the major UK regions has reacted to the four major recessions of the last 40 years, namely 1974–76, 1979–83, 1990–93 and 2008–10. The notions of resistance and recoverability are used to examine these reactions. The analysis reveals both continuities and significant changes in the regional impact of recession from one economic cycle to the next. Further, while economic structure is found to have exerted some influence on the resistance and recoverability of certain regions, in general ‘region-specific’ or ‘competitiveness’ effects appear to have played an equally, if not more, significant role.

The economy in question

Introduction The UK Economy at a Crossroads - Laurence Harris Whats Happening to UK Manufacturing? - Doreen Massey Towards a Post-Industrial Economy? - John Allen A Crisis of Mass Production - Richard Meegan Fragmented Firms, Disorganized Labour - John Allen What is an Economy Anyway? - Doreen Massey

Marshallian Industrial Districts: The Case of the Lancashire Cotton Industry in the Inter-War Years

Alfred Marshalls description of industrial districts has been used to support the argument that local agglomerations of industry can offer powerful external economies and encourage technical dynamism. This paper argues, however, that Marshalls favourable representation of industrial districts followed from his evolutionary and organic theory of economic and social progress. Industrial districts were used to demonstrate that the growth of the social organism meant differentiation and integration. Marshalls consequent exaggeration of the efficiency and potential of industrial localizations is highlighted by the example of the Lancashire cotton industry. Marshall praised the organization of the cotton industry but, in the inter-war period, rather than being a source of vitality and economy, the geographical separation and specialization of spinning and weaving intensified the industrys problems and demise. In the context of declining exports, the organization of the industry allowed an intense internal competition which acted against rationalization, investment and cooperation. In some ways, localization furthered a deterioration of industrial relations but this was not a case of obstructive trade unions suffocating inherently progressive industrial districts.

Union Retreat and the Regions: The Shrinking Landscape of Organised Labour

1. The Disorgnaised of organised Labour. 2. Situating Trade Unionism: Spaces of Regulation and Representation. 3. The Contours of Decline: Union Retreat and Resilience in the Regions. 4. Labour Market Restructuring and Regional Unionism. 5. Striking Out the Past? Geographies of Industrial Action. 6. Decentralization and Local Industrial Politics. 7. Mapping Union Futures: Representation and Organisation in a Detraditionalized Economy.

Unemployment Flow Regimes and Regional Unemployment Disparities

Almost all studies of regional and local unemployment are concerned with unemployment stock rates. In this paper, attention is focused on the unemployment flows behind these stocks. By using data for the British regions over the 1980s and 1990s, we show that regional unemployment-rate disparities are a direct reflection of different underlying regional unemployment ‘flow regimes’; that is, different patterns of inflows into, and outflows from, unemployment. In the 1980s these differences in regional flow regime were marked, but since the beginning of the 1990s they have narrowed. In addition, there appear to have been distinct ‘switches’ in regime in particular regions. These trends and shifts are considered alongside the debates surrounding the end of the ‘north—south’ unemployment divide in Britain; the claim that the British labour market is moving towards a US-style flexible, high-unemployment-turnover model; and the effects of various changes to the unemployment benefit system designed to restrict the numbers of claimants on that system.