Regional development refers to the growth of wealth and well-being in regions understood as subnational territories. It is a key element in economic policymaking to support economic stability and sustainable growth. It promotes economic inclusion and helps tackle regional disparities between areas of a country or region. This is achieved through the use of financial incentives, infrastructure investments and soft measures to promote local economies and create jobs. The development of regions also increases the competitiveness and resilience of the national economy.
Regional growth trajectories depend on both the specific characteristics of the region and the interactions between regions. For example, the life cycle of industries opens up windows of opportunity for regions to gain a foothold in a certain sector (Audretsch and Feldman 1996). These can lead to the creation of new industrial clusters and districts which boost local economic activity and increase employment. However, it can also have the opposite effect, with firms relocating to more competitive locations (Storper 2011).
The interaction between different regions is also crucial as it shapes the overall welfare positions of areas and nations. This explains why there are substantial disparities in income levels between regions within OECD countries. While this can be explained by the fact that efficient regions grow faster than less-developed regions, it may also point to other factors that influence pathways of regional development.
A growing literature suggests that human change agency plays a key role in explaining the divergent patterns of regional development. It foregrounds the idiosyncratic character of regions which cannot be explained by general structural factors, suggesting that a combination of unique conditions and relations at various spatial scales determines the path of regional development (Grillitsch and Sotarauta 2019; Dawley 2014).
About the Author
