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Governance and agglomeration: a European perspective Prof. Alan Harding Presentation to RTPI seminar on New Evidence and Opportunities for Strategic Spatial.

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Presentation on theme: "Governance and agglomeration: a European perspective Prof. Alan Harding Presentation to RTPI seminar on New Evidence and Opportunities for Strategic Spatial."— Presentation transcript:

1 Governance and agglomeration: a European perspective Prof. Alan Harding Presentation to RTPI seminar on New Evidence and Opportunities for Strategic Spatial Planning in the UK, Manchester, 2 December 2010

2 On the one hand.... City-regions are locomotives of the national economies within which they are situated, in that they are the sites of dense masses of interrelated economic activities that also typically have high levels of productivity by reason of their jointly-generated agglomeration economies and their innovative potentials Scott and Storper, 2003 Metropolitan spaces are becoming, more and more, the adequate ecosystems of advanced technology and economy…. [T]he decrease of communication costs does not by itself lead to a spreading and diffusion of wealth and power; on the contrary, it entails their polarization. Veltz, 2005

3 The ‘new’ agglomeration Literally, means ‘gathering together in a mass’ Old urban (economic) geography concept with 2 competing traditions ‘Localisation economies’, benefits experienced by firms from co-location (More recent versions; New Industrial Districts, Porter on ‘clusters’) ‘Urbanisation economies’, benefits derived by workers and households as well as firms from city size, density and variety (More recent versions; Florida on ‘the creative class’, Storper/Venables on urban ‘buzz’) Associated with key observations e.g. productivity benefits of population growth, urban wage premium (within cities and on departure) Recent rediscovery by economists who had previously ignored ‘increasing returns to scale’ Has become basis of new work on, e.g. ‘spillover effects’, ‘effective density’, attempts to explain why falling transport costs should be associated with concentration rather than dispersal of economic activity

4 Towards an ‘archipelago economy’ The knowledge economy and the ‘new’ agglomeration is argued, across soc. sci.s, to have shifted the spatial division of labour, due to: Falling trade and communication costs Changing organisational structure of firms (flattened hierarchies, outsourcing, linkages, proximity) Risk, knowledge-intensive production, density of suppliers and continued importance of face-to-face communications Changes in labour markets & household formation patterns; insurance against under- & unemployment, ‘buzz’ in areas with rich, dense labour markets Housing, capital accumulation and barriers to exit from key metropolitan regions

5 .. and its implications? Big, dense, diverse, well-connected city- regions increasingly drive regional, and by implication national, economic performance But the world is getting spikier: performance gap between city-regions is growing; stretching urban hierarchies What’s the evidence?

6 THE WORLD WAS ALWAYS SPIKY

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12 THE 90s/’NOUGHTIES’ BOOM MADE IT SPIKIER

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21 Total productivity: Agglomeration estimates Nuts 2Nuts 3Nuts 3 Large Cities Full Sample 13.57%**12.54%***4.19% 1980s8.34%**5.05%3.52% 1990s-1.99%-6.77%-1.82% 2000s10.26%***6.80%*10.46%***

22 SPIKINESS IS INTRA- AS WELL AS INTER-CITY REGIONAL

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25 AND THE BUST IS MAKING IT SPIKIER STILL

26 Recession, recovery, spikiness Areas and communities suffering worst are those that benefited least from the boom years, i.e. Places lacking a ‘knowledge economy’ and/or ‘knowledge workers’ The disconnected spaces in erstwhile booming places

27 BUT WHAT ABOUT GOVERNANCE?

28 Metropolitan/city-regional productivity and governance Much generalised (critical) analysis of state restructuring and ‘neo- liberalism’ but limited literature on meso-level governance and economic change Work of Cheshire and Magrini (2008) demonstrates statistical association between economic performance and existence of metropolitan/city-regional tier /unit of governance But treats governance as a ‘black box’ Little appreciation of what metropolitan/city-regional governance arrangements actually do and how they relate to other scales of governance/market-based decision-making Hence the CAEE project: fusing of (a) advanced econometric assessment of importance of agglomeration and (b) political science approach to the characteristics of metropolitan/city- regional governance

29 Metro-complexity Huge variation in degrees of institutionalisation of metro areas/city-regions and in their autonomy, executive capacity, political influence Key challenge: ‘going with the grain’ of the ‘new’ agglomeration rather than resisting it. Fusing ‘competitiveness’ policies (often non-spatial) with (usually spatial) ‘cohesion’ policies ‘Forms of [metropolitan and city-regional] governance.. can be interpreted as partial, and inevitably incomplete, attempts to assemble the capacity, autonomy and forms of influence that make it possible to deal more effectively with the challenges that new patterns of economic change throw up.’ [CAEE final report]

30 ‘Best practice’ On basis of case studies, ‘ideal type’ metro/city-regional arrangements have.. Supportive national context Strong technical capacity (analytical and delivery) at appropriate scale Significant influence at regional/national scales Strong horizonal networks with key public and private institutions A compelling and broadly-shared ‘narrative’ Strong leadership and co-ordinating capacity Ability to recognise and deal with the environmental and social implications of realising its strategic ambitions

31 SO WHAT FOR UK SPATIAL POLICY?

32 The coalition government’s spatial agenda Aspects of ‘rebalancing’ potentially supportive of ‘2 nd division’ metro areas/city-regions No more (formal) sub-national spatial planning; national development framework promised but timing uncertain But effect of public sector cuts likely to work against spatial rebalancing and LEPs likely to favour localities with market advantages Rate capping plus incentives to LAs for new commercial and residential development will strain LEP relations LG resource review potentially deepens inter-LA competition


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