Phil Tomlinson<\/a>, University of Bath<\/a><\/em>; Christos Pitelis<\/a>, Brunel University London<\/a><\/em>, and David Bailey<\/a>, Aston University<\/a><\/em><\/p>\n Some locations become well known for the kinds of industry that have once thrived there \u2013 tin mining in Cornwall, steel in Sheffield, shipbuilding in Glasgow. But the industrial landscape is not set in stone \u2013 it changes. And in order to boost local and national economies, plans need to be made and strategies invented.<\/p>\n One idea that has become popular with politicians is what is known as a \u201cplace-based\u201d industrial strategy<\/a>. It is a key component of the European Union\u2019s 2020 innovation programme<\/a>, and features heavily in the UK government\u2019s plans for British industry<\/a>.<\/p>\n Put simply, \u201cplace-based\u201d strategies are specifically tailored towards developing a place\u2019s existing advantages, specialisms and capabilities, and diversifying them onto new growth trajectories. These in turn are rooted in a location\u2019s history, culture and geography.<\/p>\n It could mean, for instance, supporting the ceramics industry<\/a> in Stoke on Trent in the UK, to diversify into related technological fields such as materials science<\/a>, where new market opportunities lie.<\/p>\n With this approach, the emphasis is upon place \u2013 and knowledge \u2013 rather than particular sectors. It aims to encourage entrepreneurship and innovation that cuts across traditional sector boundaries.<\/p>\n In this sense, place-based industrial strategies are different to previous \u201ctop-down\u201d policies, in which central governments pursue a one-size-fits all solution (such as universal training programmes or tax credits) to spur growth. Instead, policies are geared towards a place\u2019s specific characteristics to spur local \u2013 and inclusive<\/a> \u2013 growth.<\/p>\n The problem is that all industrial strategies require funding. And in a global economy the benefits of publicly funded projects may end up being captured by large private firms \u2013 multinational corporations with no allegiance to specific places.<\/p>\n So how can a place-based industrial strategy ensure that the benefits of publicly funded projects are retained within a region \u2013 and shared in a way that delivers sustainable and inclusive economic growth? In a forthcoming article in the Cambridge Journal of Economics<\/a>, we propose the following solution.<\/p>\n Firstly, regional policy makers and businesses need to identify their current (and possible new) competitive advantages. New specialisms often emerge by fusing new technologies with existing expertise and capabilities. For instance in Italy, Emilia Romagna\u2019s machine packaging industry<\/a> has retained its international competitive position by continually integrating new electronics, information and communication technologies with its traditional mechanical systems. This has opened up profitable opportunities in new (but related) market segments such as pharmaceutical machine packaging.<\/p>\n Regions then need to build platforms which foster growth. These could include establishing strong business and knowledge networks to drive innovation. There is a key role here for large private and public sector \u201canchor institutions<\/a>\u201d \u2013 embedded in the region \u2013 which heavily engage in research and development and can facilitate such network links. The Fraunhofer institutes<\/a> have long played this role in driving innovation within German regions \u2013 and it is hoped that similar initiatives in the UK, such as the new Catapult Centres<\/a> will bring similar results.<\/p>\n It is also important for regions to develop a \u201cplace brand\u201d. To be internationally competitive, places need to differentiate themselves and offer unique qualities and bespoke products and services. Motor Sport Valley<\/a> in Northamptonshire for instance, has established a global reputation for innovation in Formula One. And emerging clusters such as English sparkling wines<\/a> in Sussex and Kent, have begun to distinguish themselves with their high-quality award-winning wineries.<\/p>\n Regions then need to create \u201cplace specific\u201d strengths which are not vulnerable to offshoring and low-cost competition. This may mean local firms developing niche specialisms that are difficult to imitate elsewhere.<\/p>\nLocal money for local people<\/h2>\n
The right formula<\/h2>\n