Dilemmas of Regional and Local Development

Jerzy Bański, Jerzy Bański

• Éditeur: Routledge
• Année: 2020
• ISBN:
  9780429783265
• Édition: 1
• Sujet: Politics & International Relations
• Sous-sujet: Local & Regional Planning Public Policy

Dilemmas of Regional and Local Development aims to identify, diagnose and evaluate various approaches towards regional and local socio-economic development.

Over the course of the book, authors from12 countries and four continents come together to review experiences and solutions related to regional development in a range of different economic, social and political systems. The first part of the volume focuses on the fundamentals of planning regional and local development, particularly focusing on theoretical solutions and development policy concepts. The second part is more applied, looking at practical instruments and solutions for shaping the local economy, and analysing effective development policy.

This book will be of interest to economics, geography, politics, and planning scholars and researchers working on regional sciences and local development.

Part I

Development concepts and planning

1 Redefining the task of regional development in the Fourth Industrial Revolution

Some Australian perspectives

Anthony Sorensen

Introduction

This chapter focuses on how communities and regions can navigate a world of increasingly rapid and transformative technological change, massive uncertainty and unimaginable complexity to deliver economic growth and prosperity for their residents. This task is largely theoretical and conceptual. Our age is variously termed the New (Anderson, 2012), Third (Rifkin, 2011) or even Fourth Industrial Revolutions (Rose, 2016; Schwab, 2016), the Second Machine Age (Brynjolfsson and McAfee, 2014), or even Fifth Era (Le Merle and Davis, 2017). In it, impending technologies will rewrite many of our ideas about, and preferences concerning, the structure and management of economy, society, environment and even polity. Nearly all dimensions of regional economies are likely to evolve rapidly from their current configuration to very different models within ten or 20 years. Moreover, society may have very little overall control over the trajectory of events. Indeed, those communities and industries unable to embrace change constructively may expire painfully, which raises the defining question of how we may best efficiently and equitably usher in the future. We also explore these themes in an Australian context and in particular in the author’s home town of Armidale, drawing on the author’s lifetime of research on Australian regional development processes and extensive practical experience in his own community. Given Australia’s huge global interconnectivity, this discussion necessarily ranges across all spatial scales from international to local.

Background: technologies and their impacts

The raft of technologies shown in Figure 1.1 will largely drive this transformation. They themselves reflect an extensive literature (e.g. Baldwin, 2016; Brock, 2006; Brockman, 2017; Brynjolfsson and McAfee, 2014; Ford, 2009; Greengard, 2015; Kellmereit and Obodovski, 2013; Kelly, 2016; Wood, 2014). Each separately will likely have major economic and social impacts, but their rapid mutual blending, fusion and integration (Brynjolfsson and McAfee, 2014) will lead to many new, unexpected and likewise transformative technologies. Such processes are likely to accelerate exponentially, rather like Moore’s law (Brock, 2006), which accurately forecast the doubling in the power of semiconductors every 18–24 months over the last 50 years. The collective impact of the technologies noted in Figure 1.1 is unlikely to match our experience with semiconductors. However, note that throughout much of the last 150 years the rate at which: (a) scientific discoveries have emerged; (b) new technologies have evolved from them; (c) their incorporation into products and services; and (d) resulting consumer uptake have all accelerated markedly (Kurzweil, 2001). This accelerating escalator of change promises large-scale disruption of current spatial patterns of economy and society noted in Table 1.1

These individual impacts are, of course, themselves complexly and recursively intertwined, as suggested in Figure 1.2. Even more capriciously, such impacts are likely to vary spatially within and between regions because of local resource portfolios whose dimensions include:

• Geographical accessibility;

• Aspects of environmental quality including soils, minerals, landscape and climate;

• Infrastructure effectiveness, including transport, telecommunications, health care and education;

• Population size, density and demographic structures;

• Knowledge and skills bases;

• Social capital – including in particular leadership quality;

• Business and community cultures;

• Quantity and quality of financial resources, including availability of venture capital; and

• Governance structures, including bureaucratic competence.

Figure 1.1 Technological Drivers.

Source: The author, but based on many of the references cited in this chapter.

Table 1.1 Domains impacted by technology

	Items
1	Goods and services produced, and business structures
2	Machinery and equipment employed
3	The jobs we do (maybe 28 + % highly vulnerable on recent Australian estimates) and skills required
4	Length of working life and organisation of the working week (e.g. emergence of the gig economy)
5	Demographic structures (e.g. family size, dependency ratios, longevity)
6	A widening of lifestyle options and preferences
7	Diversification of mobility options (means, destinations, purposes – including leisure and recreation)
8	Potentially large increases in social and economic inequality (wealth and income)
9	Governance issues: the appropriate configuration of regions, provinces and nations to handle the transition (today’s configuration seems inappropriate for economy and society as it is emerging)
10	Environmental quality and availability of physical resources
11	Most aspects of amenity

Source: The author (based on the literature cited)

Figure 1.2 Extended Complexity.

Source: The Author.

In short, geography often matters greatly in determining the outcomes of technological change and this explains why all previous industrial revolutions had severe negative spatial impacts for some communities, but strongly propelled others forward (Berleant, 2014; Brockman, 2014; Diamond, 2005; Florida, 2010; Leonard, 2016; Mills, 2013; Rawlings, Smith and Bencini, 2013; Susskind and Susskind, 2016)! Outcomes this time around will be similar. This said, we can modify geography to some extent. Factors at work here include government investment in infrastructure, macro-economic management including subsidies and regulation, and local transformative action on the part of regional business, community groups and local governments. Perhaps, too, luck can play a part in adaptive capacity as when technology leverages a region’s resources upwards.

If geography within nations is important in determining technologies’ impacts, so too are numerous other domestic and international considerations. For example, impacts within nations may be to some extent hostage to the country’s international competitiveness on many macro-economic dimensions. These include as fiscal, monetary and budgetary settings; national, business and consumer indebtedness; effectiveness of corporate and small business regulations – especially those connected with innovation; economic stability and the absence of financial crises; and effective reserve bank strategies to eliminate inflation and maintain a competitive currency (Kahneman, 2011; King, 2016; Prechter, 2001; Taleb, 2007, 2012; Thaler, 2015). By way of example, sharp fluctuations in currency valuation can dramatically affect regional prosperity. In Australia’s case, mineral and agricultural produce typically accounted for almost 75 per cent of exports in 2017. However, prices for such commodities are inherently unstable, reflecting global demand and supply balances. Worse, nearly all commodity prices are denominated in US and UK currencies. On top of this, a surge in some primary industry exports in the first half of this decade propelled the Australian dollar’s valuation to US$1.10 at its peak, while it subsequently slumped to US$0.72 in late 2018. What this means is that farm and mining incomes are hugely unstable over time, with potentially severe impact on some regional incomes where primary production dominates.

Another element is maintenance of domestic social harmony and equity through top-class social security programmes. Internationally, the rise of newly industrialising countries such as Brazil, India, Indonesia and Vietnam could well affect technologies’ local impacts by encouraging both import substitution and the opening up of vibrant new export markets for goods and services. This dimension is to some extent hostage to fluctuating, but generally growing, international trade settings between countries. Australia, for example, has embraced free trade energetically by joining the Trans-Pacific Partnership, and has negotiated bilateral free-trade agreements with a host of countries including New Zealand, the United States and many Asian nations such as China, Japan and even Indonesia. Trade agreements with the European Union and the United Kingdom are also under consideration. Of course, openness to international trade and its impacts is highly variable between countries. Although Australia is embracing ever-growing free trade, some other nations appear to be erecting higher trade barriers, as appears to be the case with the United States’ approaches to China, NAFTA and Australia. Patterns of international migration may also affect technologies’ impacts regionally within nations, since many migrants are skilled, energetic and have valuable overseas connections. Again, Australia has among the most open borders in this regard, with permanent immigrants exceeding domestic natural increase and 28 per cent of the nation’s population having been born overseas (ABS, 2017). Other potential levers influencing the impact of technology could well be the likes of global warming and associated environmental shifts.

In short, the emerging technological world is surrounded by a huge constellation of messily interconnected variables as shown in Figure 1.3, which suggests that many societies’ abilities to navigate the future on an even keel could be highly challenging. Particularly worrying here is government’s apparently diminishing control over events in many countries, a trend that also has a multitude of causes. To start with, the development of technologies lies mainly in the private sector or with various kinds of largely independent, but albeit publicly funded, research institutes. In Australia’s case, for instance, these include universities, the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and several Rural Industries Research and Development Corporations. Government’s role lies mainly in regulating technologies’ (Williamson et al., 2015) uses in many different ways. These include: (a) the maintenance of competitive commercial environments and avoiding the emergence of domineering monopolies; (b) preserving public safety and national security; (c) ensuring peoples’ privacy; (d) avoiding various kinds of social conflict, which could increasingly include an inter-generational component; and (e) conserving environmental resources for future generations. Once again, such dimensions are internally complex, frequently intersect, and evolve rapidly so that most politicians scarcely understand what is going on and are ‘all at sea’ in deciding what to do. They are beset by conflicting community perspectives, which extend way beyond the previous twofold distinction between capital and labour. One recent study concluded that Britain has no less than seven socio-economic classes (Savage et al., 2013). So elected politicians find it increasingly hard to assess policy options and promote them to the public at large. Consequently, political systems globally are increasingly playing catch-up with events rather than leading nations into the future, and resorting to simplistic debate and proposed solutions when complex change is desirable. Worse still, maybe 70 per cent or more of the population in many countries is ignorant of the trajectory of change, or either apprehensive or terrified about it, so that political parties seeking power are forced to offer defensive and conservative diagnoses and strategies. Thus, politics is likely to become reactionary rather than proactive in driving the future (Gurri, 2014).

Figure 1.3 A Complex Mess.

Source: The Author.

In this environment, many governments are prone to establish advisory agencies to diagnose problems and recommend solutions. For example, Australia’s CSIRO (Taylor et al., 2017) recently identified four major future scenarios for regional communities depending on two intersecting dimensions of regional prowess. The vertical dimension assesses technical prowess and interconnectivity ranging from vast to limited, while the horizontal dimension focuses on human capital and economic diversity ranging from limited to diverse. Weak regions on both dimensions will likely struggle to hold ground, while those that are strong are likely to be ‘fast and flexible’. The other intermediate scenarios apply to regions with natural advantages or ability to develop global niches. Such an approach has the merit of simplifying the range of potential regional trajectories and associated problems, and thereby aiding the framing of government’s and indeed communities’ policy options. However, it also ignores the problem that many of Australia’s often-large regions or local government areas harbour elements of several of these scenarios, with consequent internal tensions between them!

If we put the many diagrams in this section together, we are in for a very wild ride involving uncertain direction, huge complexity and an accelerating pace of change in a world where almost everything affects everything else. In addition, governments, businesses and communities alike often possess uncertain control of events, are often at odds with each other, and display conservative bias. As in all past industrial revolutions, there will likely be major regional winners and losers from the passage of events. Many authors have had a go at imagining the future, often including spatial variability in outcomes (Brin and Bear, 2015; Carr, 2014; Cass, 2014; Diamandis and Kotler, 2012; Ford, 2009; Kelly, 2016; Leonard, 2016; Mills, 2013; Rawlings et al., 2013; Ross, 2016; Stephenson et al., 2013; Wadhwa and Salkever, 2017; de Waele, 2014; Williamson et al., 2015).

Thus, the regional development task is likely to come down to two interconnected themes. On the one hand, how can regions best surf the upside of a huge array of opportunities presenting themselves? Moreover, second, how can we mitigate the inevitable downside of rapid economic and social change, namely, the collapse of businesses and associated loss of jobs coupled with rising spatial inequalities in wealth and income? Unless nations and communities address this second dimension, they risk society tearing themselves apart and the rise of various forms of malfunctioning extremism. In short, the last thing we need is a re-run of the 1930s depression across various spatial scales from the local to the national. Back then, nations sought to protect industries by erecting trade barriers and competitively devaluing their currencies (Eichengreen and Irwin, 2010). Both the questions we posed initially require simultaneous and vibrant action that is unbelievably multifaceted and involving the whole of society. Moreover, they will have a strong element of trial and error because many aspects of the future are uncharted. Indeed, the failure rate of start-up enterprises in Silicon Valley is estimated to be approaching 90 per cent but that has not prevented an endless queue of entrepreneurs from chancing their luck. So sitting serenely on the sidelines observing decay and ruin is not an option, althou...