This session has debated the processes and drivers of territorial convergence and divergence across Europe and amongst the major advanced OECD and emerging market economies globally, before turning to contradictions of spatial economic growth. It started with an overview of long-term trends in regional convergence in Europe by Vlad Mykhnenko, University of Oxford (UK). He showed how the gap between Europe’s haves and have-nots had been narrowing over the past 35 years. The aggregate decline in regional income inequalities across the EU-28 during the period 1980-2015 amounted to at least 7.2%, in terms of the average spread of regional GDP per capita (Mykhnenko & Wolff, 2018). Consequently, Ayda Eraydın, Middle East Technical University (Ankara), turned to explain the recent urban and regional growth trajectories in Turkey, focussing on the role different flows of capital play in fuelling the construction boom and export-orientated activities as the key drivers of the catching-up process across the country. She warned the policy-makers in the region to understand the fragile nature of over-reliance on the global capital financing of spatial economic growth.
Dieter Kogler, University College Dublin (Ireland), argued that local knowledge is the foundation for regional competitive advantage, whereas very little attention was paid in the literature to the actual type of knowledge produced by the variety of actors within specific places. He suggested promising avenues for technological specialisation and diversification patterns by highlighting indicators and measures related to processes of local knowledge production, serving as the foundations to identify local opportunities in the ‘Knowledge Space’ of regional economies (Kogler et al., 2013; 2017). Finally, Riccardo Crescenzi, London School of Economics (UK), presented some key stylised facts on the link between internationalization, global connectivity and innovation in the regions of the world (https://dv-lse.github.io/fdi-patent-innovate). There was a strong link between the ability of regions to attract foreign investments and their innovation trajectories. Therefore, ‘less innovative’ regions wishing to leverage foreign investments and boost their innovation capabilities should carefully consider the type, nature, and strategy of foreign companies. Technological giants might not bring the expected innovation benefits to their host economies due to their capacity to retain key staff and higher technological sophistication in comparison with many domestic firms. It is important to keep in mind that the attraction of the ‘right’ foreign investors is only the initial step. Embedding foreign firms into the local economy, nurturing their linkages with domestic firms is a must for policy makers in less developed regions (see http://blogs.lse.ac.uk/gild/ ).
The session was organized by the Regional Studies Association with the support of three major research projects currently active in this field, including the JPI Urban Europe ENSUF-funded 3S RECIPE project, the ERC TechEvo Project, and the ERC MASSIVE Project.
Take away message
The gap between Europe’s haves and have-nots has been narrowing over the past 35 years. Since 1980, cities and regions across the EU have been converging economically, becoming increasingly similar in per capita incomes and real growth rates. Nevertheless, innovation remains highly spatially concentrated and cities and regions that do not move into the higher value added activities face growing competition from less developed cities and regions. Competitive cities and regions generate few knowledge spill-overs and this must change.
Vlad Mykhnenko, University of Oxford: “Europe’s regional convergence trends have become much stronger since 2000, coinciding with the eastward enlargement of the EU. Between 1995 and 2015, the gap in regional GDP per capita levels decreased by 10.6% on average”.
Dieter Kogler, University College Dublin: “New indicators and measures related to processes of local knowledge production are of crucial importance to identify local opportunities in the ‘Knowledge Space’ of regional economies”.
Ayda Eraydın, Middle East Technical University: “Most authors have focussed so far on the skilled, ‘creative’, ‘innovative’, and ‘talented’ types of labour. We must stress the great positive contribution that the unskilled, low-wage, ‘flexible’, and temporary immigrant labour makes to the economic competitiveness of our cities, too”.
Riccardo Crescenzi, London School of Economics: “Foreign Investors are difficult to mobilise and embed in regional innovation strategies. This is a complex challenge for regional innovation strategies in less developed regions: More research is needed on tools that work in practice!”.