Territorial Capital: a new Perspective on urban Competitiveness?

Transcription

1 Territorial Capital: a new Perspective on urban Competitiveness? Rudolf Giffinger paper presented at SPA-CE.NET Conference Budapest, 26th of september, /rg

2 overview urban competitiveness changes in understanding governance challenges meaning of territorial capital urban regional assets understanding meaning of governance conclusions a new perspective? what can we learn? 2/rg

3 competitiveness: an issue on the urban level? Competitiveness is a meaningless word when applied to national economies. And the obsession with competitiveness is both wrong and dangerous. Krugman, 1997, S.22 arguments increasing competition between cities loss of productive activities through globalisation footloose firms through tertiarisation similar conditions on national level through economic integration into the EU problems of unutilized potentials (productive factors) due to new conditions of accessibility new urban/metropolitan hinterland and market potentials 3/rg concerns firms acting globally in networks only about 10 % urban economic performance concerns small and medium sized firms acting on the interregional level very often in a transborder context a rapidly increasing or decreasing share for urban economic performance

4 theoretical arguments for endogenous agglomeration new economic geography 1. explains the endogenous and cumulative process of the agglomeration of activities in economic and demographic terms 2. agglomerative development: result of the interaction of increasing returns to scale and of transport costs enforcing firms to concentrate production in one unit to locate this production unit near to final demand of intermediate markets or consumers attraction of inhabitants (migrants) and firms because of job opportunities and supply of high qualified work force with moderate salaries 3. peripheral regional development based on its specialised endogenous growth potential as a result of its attractivity for complementary economic functions local functional endowment factors (for production) as relative advantages Krugman 1991; Maier and Tödtling 2002: 111 ff 4/rg

5 arguments for urban-regional competitiveness agglomeration (i.e. spatial concentration) of competitive economic activities predominantly depends on increasing agglomeration economies returns to scale interlinked in a cumulative way with convenient (qualified, cheap) factor costs and market potentials enhanced through decreasing transaction costs (transport, information, other barriers) intrinsic trend for specialisation and clustering effects of innovation growing impact on productivity of labour and capital the higher the level of development (productivity, technological standard) already is implies a path dependency of many cities and regions clear focus on agglomeration economies 5/rg

6 competitiveness change in understanding simple concept concentration on economic performance as relevant output only potentials of supply and factor costs as decisive influencing factors complex concept consideration of economy, society and policy as an interlinked system multidimensional description of the urban development economic performance and standards of living as relevant output [ ] the ability of an economy to attract and maintain firms with stable or rising market shares in an activity, while maintaining stable or increasing standards of living for those who participate in it Storper, /rg governance challenge " as a proactive city which is able to mobilise local, social, political and economic resources in a coherent institutional framework to develop and sustain a long-term support for a clear economic development strategy." Parkinson, 1997, S.125

7 urban-regional competitiveness: a maze? +/- issues of urban-regional governance and development policy 7/rg own conception based on Begg, 1999, S.802

8 from competitiveness to territorial capital assets of cities analogy to the formation of a firm / company basic argument: transaction costs nach Coase (1960) city s specific assets identification of cultural, economic, social characteristics as starting point for specialisation and positioning perspective from an entrepreneurial point of view (entrepreneurial understanding) economic factors (real estates, labour, capital, knowledge) relative advantages through convinient endowment factors in particular, cheap production factors strategic factors absolute advantages through friendly/convenient environment for firms through the reduction of transaction costs Consequence the emergence of a pure managerial approach instead of a proactive understanding of development considerung private, semi-private and public actors 8/rg

9 territorial capital in an economic perspective territorial capital is regarded as a distinct bundle of factors which attracts investments and makes the return of certain investments higher than in other regions OECD, 2001, p.15 f higher return for certain kinds of investments because they are better suited to the area and use its assets and potentials more effectively in a policy related perspective kind of meta concept considering inhomogeneous potentials and assets and regional diversity across cities and regions in Europe governance challenges within and across regions every (urban) region has its own territorial relative and absolute advantages for certain kinds of investment specific territorial governance efforts necessary for its mobilization 9/rg

10 territorial capital in a comprehensive perspective functional factors size geographical location production endowment traditions, climate, natural ressources quality of life. relative adv. untraded interdependencies as social capital customs informal rules understanding enabeling cooperation, co-option of ideas, mutual assistance and solidarity absolute adv. environment as an intangible factor dependent on combination of institutions rules & practices strategies and policies providing creativity and innovation absolute adv. 10/rg territorial capital approach OECD, 2001, p.15 f similar to factors of urban competitiveness but agglomeration effects are not decisive factors comparable to my description before based on Begg, 1999, and Parkinson, 2003

11 territorial capital enhances understanding of urban competitiveness focus on intangibel assets includes further dimensions social, cultural, environmental, etc. providing absolute advantages enforcing spezialisation and positioning emphasizes the importance and meaning of governance for adequate territories across regions to strenghten the organisational capacity cooperation of corresponding stakeholders identification of a territory s capital and perspectives precision of economic spezialisation definition of its position against other regions 11/rg

12 differences to competitiveness Territorial capital combination of functional endowment factors AND the knowledge/the ability to make best use of endogenous assets. basic functional endowment elements natural features, material and immaterial cultural, technical and social heritage; locally bounded qualities and potentials Parkinson, 1997 basic relational elements goods like networks, clusters, cooperative initiatives, etcetera as cognitive, social, cultural and institutional capital Storper, 1997; Healey, /rg

13 a new perspective in research and governance advice? no basically, reasoning on urban-regional development in the same way based on NEG approach issues and challenges of urban governance efforts regarding urban devlopment already known - in particular in the economic and social dimension yes, partly specific assets as relational elements become important untradeable elements and specific environment governance as endogenous element of territorial capital clear reasoning towards spezialisation through the enforcement of functional endowment factors and corresponding potentials and the enforcement of relational elements of specific assets in order to enhance its territorial capital concept applicable to non-urban and peripheral regions 13/rg

14 conclusions competitiveness is not meaningless for many cities and regions spatial development is not based on agglomeration effects or metropolitan functions only, but on its specific territorial capital absolute advantages through specific assets become increasingly important and provide interegional trade and socio-cultural exchange however, risk of dependence for distinct regions through monostructured economy the territorial capital approach seems to be realistic and fruitful for spatial development in CE and SEE due to the diversity of assets across all regions and cities in Europe territorial capital is less used in an optimal way the more boundaries and borders affect transaction costs of economic activities, resp. restrain the evolvement of untraded interdependencies or productive/innovative environment 14/rg

15 15/rg thank you for attention

16 Literatur Begg I. (1999) Cities and Comptitiveness. Urban Studies, 36, S Bökemann D. (1982) Theorie der Raumplanung. Wien, München: Oldenburg. Coase R. (1960) The problem of social cost, Journal of Law and Economics, 3, S Fujita M., Krugman P. und Venables A.J. (1999) THe spatial Economy. Cambridge, MAss.: MIT Press. Friedman J. (2002) Prospect of Cities. Minneapolis/London: University of Minnesota Press. Giffinger R. und Wimmer H. (2005) The Meaning of City-to-City Cooperation: lessons from Vienna. In R. Giffinger (Hrsg.) Competition between Cities: Chances and Risks of Cooperation, Bratislava: Road. Giffinger R., Kramar H. (SRF), Mayerhofer P. (Wifo), Musil R. (ÖAdW) (2006) Foreign Direct Investments, locational Potentials and Competitiveness of Metropolitan Regions in Europe. Paper presented at the EURA-Conference Cities in City Regions, Warsaw, of May Grossman G.M. und Helpman E. (1991) Innovation and Growth in the global Economy. Cambridge, MA: MIT Press. Krugman P. (1991) Geography and Trade, Cambridge: MIT Press. Krugman P. (1997) Pop Internationalism. Cambridge, MA: MIT Press. Maier G. und Tödtling F. (2002) Regionalentwicklung und Regionalpolitik, Wien, New York: Springer Mayerhofer P. (2003) Zweiter Bericht zur internationalen Wettbewerbsfähigkeit Wiens., Österreichisches Institut für Wirtschaftsforschung im Auftrag des Magistrats der Stadt Wien, MA27, Wien. Parkinson M. (1997) The rise of the European entrepreneurial city. In: Financing of cities and regions: subsidiarity and finance potentials. East-West Conference, Munich, October (Conference proceedings, pp ). Stiens G. (1996) Prognostik in der Geographie. Braunschweig: Westermann Schulbuchverlag GmbH. Storper M. (1997) The regional World. New York: Guilford. 16/rg

17 Workshop Territorial Capital and Governance in a Central and Southeast European perspective Meaning for urban and regional development Challenges Research issues 17/rg

18 background increasing pressure of comepetition between cities and regions Economic restructuring globalisation and technological change mobility of firms, capital changing locational profile process of integration in Europe reduction of barriers new market potentials new challenges for cities and urban regions political goals on the EU level Lisbon targets 2000 enforcment of the EU s competitiveness increasingly based on the concept of European metropolises territorial agenda / cohesion Leipzig emphasize of diversity in territorial capital across EU as a chance 18/rg discussion about: enforcement of the urban competitiveness the meaning and influence of its territorial capital

19 Workshop: hypothesis spatial development is based on agglomeration effects or metropolitan functions only they provide highest returns and agglomeration economies only large cities will grow and have competitive economic activities for spatial development a specific territorial capital essential absolute advantages through specific assets become increasingly important for territorial cohesion acccessibility, trade, socio-cultural exchange however, risk of dependence through monostructured economy embeddedness of firms as an urban-regional asset and precondition of competitiveness less conflicts, more particiaption/interaction, less transaction costs 19/rg

20 Workshop the territorial capital approach seems to be realistic and fruitful for spatial development in CE and SEE enormous diversity of assets across all regions and cities in CE and SEE its utilisation is suboptimal through different reasons... 20/rg

21 Workshop territorial capital is less used in an optimal way the more boundaries and borders cause transaction costs for economic and sociocultural activities activities, resp. restrain the evolvement of untraded interdependencies or productive/innovative environment in particular, this is the case the later/more recent the European integration process/enlargement took place the more historical reasons are responsible for fragmentation resp. integration the less the capacity of the administrative system is 21/rg

22 workshop further arguments and hypothesis... 22/rg