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Regional Competitiveness: An Elusive yet Key Concept?Michael Kitsona; Ron Martinb; Peter Tylerca Judge Institute of Management, University of Cambridge, Cambridge, UK b Department of

Geography, Department of Land Economy, University of Cambridge, Cambridge, UK c Department ofLand Economy, University of Cambridge, Cambridge, UK

Online publication date: 18 August 2010

To cite this Article Kitson, Michael , Martin, Ron and Tyler, Peter(2004) 'Regional Competitiveness: An Elusive yet KeyConcept?', Regional Studies, 38: 9, 991 999

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Regional Studies, Vol. 38.9, pp. 991999, December 2004

Regional Competitiveness: An Elusive yet Key

Concept?

MICHA EL K IT S ON*, RON MA RT IN and PET ER T YLER * Judge Institute of Management, Department of Geography and Department of Land Economy, University of Cambridge,

Cambridge, U K. Emails: [email protected]; [email protected]; [email protected]

INTR OD U CTION established a European Council of Competitiveness,and it undertook to produce a regular Competitiveness

There is now widespread agreement that we are wit-

Report on the performance of the economy of thenessing the resurgence of regions as key loci in theEuropean Union (the most recent being the seventh,

organization and governance of economic growth andfor 2003). In the European Union, the issue of com-

wealth creation. A previous special issue of this journalpetitiveness has taken on particular significance in rela-

(Rethinking the Regions, Regional Studies (2003)tion to its Lisbon growth strategy, with its highly

37(6/7)) was devoted to recent developments andambitious aim to close the competitiveness gap with

debates in regional development theory. The presentthe USA and to become the worlds most dynamic

special issue on Regional Competitiveness is intendedand competitive knowledge-based economy by 2010.to complement that earlier collection of papers byIn addition, numerous private organizations and con-focusing on what has become one of the most discussedsultancies concerned with measuring and lobbying theaspects of the new concern with regions, namelycause of competitiveness have emerged recently, suchtheir competitive performance. The competitiveness ofas the World Economic Forum (Geneva, Switzerland),regions is an issue not just of academic interest andthe Competitiveness Institute (Barcelona, Spain), the

debate, but also of increasing policy deliberation and Council on Competitiveness (Washington, DC, USA)action. However, as the papers in this issue make clear,and the Institute for Strategy and Competitivenessthe very notion of regional competitiveness is itself(Harvard, MA, USA).complex and contentious, and even though policy-

This focus on competitiveness has not just been amakers everywhere have jumped onto the regional andmacroeconomic phenomenon, however. It has alsourban competitiveness bandwagon, we are far from aassumed key significance at the regional, urban andconsensus on what is meant by the term and how itlocal scales. Within governmental circles, interest hascan be measured: as is often the case, policy hasgrown in the competitive performance of individualraced ahead of conceptual understanding and empiricalregions and cities, with identifying the key determi-analysis. The papers included in this issue are intendednants of regional and urban competitiveness, and withto advance that understanding and analysis. The pur-devising policies to promote and foster those determi-pose of this extended Editorial introduction is tonants. In the UK, for example, the improvement ofprovide some of the background to this project.regional and urban competitiveness has moved tocentral stage in the policy statements of the Treasury,

T H E C O M P E T I T I V E N E S S F A D Department of Trade and Industry, and the Office

of the Deputy Prime Minister (D TI , 2004; H. M.The credo of competitiveness has attracted a veritableT, 2001, 2003, 2004; ODPM, 2003, 2004).host of believers and followers. Economists and expertsLikewise, the E C (2004)everywhere have elevated competitiveness to the statussees the improvement of competitiveness in Europesof a natural law of the modern capitalist economy.lagging regions as vital to social cohesion. At theTo assess a countrys competitiveness and to devisesame time, city and regional authorities are themselvespolicies to enhance it have become officially institution-increasingly obsessed with constructing local competi-alized tasks in many nations, e.g. the USA, the UK,tiveness indices so as to compare the relative standingBelgium, Italy, the Netherlands and Japan. The USAof their localities with that of others, and with devisingled the way in the early 1990s by setting up a govern-

policy strategies to move their area up the competi-mental Competitiveness Policy Council to report regu-tiveness league table. Thus, in the same way thatlarly on and to promote the competitiveness of the US

economy. In the same year, the European Commission the World Economic Forum produces annual global

0034-3404 print/1360-0591 online/04/090991-09 2004 Regional Studies Association DOI:10.1080/0034340042000320816

http://www.regional-studies-assoc.ac.uk


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992 Michael Kitson et al.

competitiveness indices that rank national economies, measure of regional competitiveness is problematic.

First, it uses a concept of competitiveness definedso a plethora of city and regional indices have appearedthat rank places on the basis of this or that measure of originally for national economies without questioning

whether this is the most useful or meaningful conceptcompetitiveness. The Progressive Policy Institute in

Washington, DC, for example, compiles various new for use at the sub-national (urban and regional) scale.

Second, as a consequence, it carries over all the prob-economy indices for US cities and regions (A - and C , 2002; A and W , lems and debates that surround the notion of nationalcompetitiveness as defined in trade and export terms.2002). R H A (2004a, b)

produces the World Knowledge Competitiveness Index For even at the national level, there is considerable

disagreement over the idea of competitivenessthat seeks to benchmark the globes leading knowledgeeconomy regions; it also produces a European (C and S , 2002). As K (1996a, b)

and others (e.g. G L, 1995) haveCompetitiveness Index that ranks cities and regions.

Yet another of these indices of place competitiveness pointed out, there may be less to the export marketshare view of competitiveness than meets the eye. Theis F s (2002) creativity index, a proxy for an

areas openness to different kinds of people and ideas. complaint is that while the notion of competitivenessmay well be meaningful for an individual firm, it isHowever, this new focus on territorial competi-

tiveness is itself highly problematic. For despite the misplaced to carry the concept over to the aggregatenational economy: national economies do not go out ofrush to measure, compare and promote regional com-

petitiveness, the very notion is contentious and far business such as uncompetitive firms, and internationaltrade is far from being a zero-sum game.from well understood. As G et al. (in this

volume) ask: What, precisely, is meant by the competi- Traditionally, in economics, the notion ofcomparativeadvantage (with roots going back to Ricardo and re-tiveness of regions, cities and localities? In what sense

do regions and cities compete? How can regional formulated in modern guise by Heckscher and Ohlin)

has been used rather than that of competitive advantagecompetitiveness be measured? What are the connec-

tions between regional competitiveness and regional or competitiveness. The concept of comparative advan-

tage holds that countries, through specialization, caneconomic prosperity? Although the academic literature

on regional and urban competitiveness has been benefit from trade even if they do not have an absoluteadvantage, so that trade can be a positive sum game. Itexpanding (e.g. S, 1992; C and

G, 1995; D, 1995; G L, acts as an antidote to some of the paranoia about

globalization, the development of the newly industrial-1995; S, 1995, 1997; J -B et al.,

1997; B, 1999, 2002; U S, 1999; izing countries and the rise in outsourcing. Undercomparative advantage theory, trade reflects nationalC , 2003; P, 1998a, b, 2000, 2001,

2003), there is still no generally agreed theoretical or differences in factor endowments (land, labour, natural

resources and capital). Nations gain factor-basedempirical framework for answering these questions.

The concern is that there is an elusive concept, flawed comparative advantage in industries that make intensiveuse of the factors they possess in abundance. But theindicators and over-prescribed policies.

concept of comparative advantage has limitations. It is

a static concept based on inherited factor endowmentsC O M P E T I T I V E N E S S : A N E L U S I V E and, in most forms, it assumes diminishing returns

CONCE P T to scale and equivalent technologies across nations.

Nevertheless, comparative advantage based on factorsAt its simplest, regional (and urban) competitivenessof production has intuitive appeal and has certainlymight be defined as the success with which regionsplayed a role in determining trade patterns in many

and cities compete with one another in some way. industries. It is also a view that has informed muchThis might be over shares of (national, and especiallygovernment policy toward competitiveness, becauseinternational) export markets. Or it might be overgovernments believe they can alter factor advantageattracting capital or workers. Such notions would seemthrough various forms of intervention, especially byto underpin Michael Ss (1997, p. 20) defini-altering factor costs (through reductions in interesttion of place competitiveness as:rates, efforts to hold down wages, currency devaluation,

The ability of an (urban) economy to attract and maintain subsidies, export credits, etc.).firms with stable or rising market shares in an activity

Over the past 20 years or so, however, there haswhile maintaining or increasing standards of living for

been a growing sentiment that comparative advantagethose who participate in it.

based on factors of production is not sufficient to

explain patterns of trade. A new paradigm of competitiveSimilarly, in recent work on regional competitiveness,P (1998a, b, 2000, 2001a, b) has emphasized advantagehas risen to the fore. This is meant to capture

the view that nations can develop and improve theirthe key role of export-orientated clusters as the basisfor a high regional standard of living. competitive position. It focuses on the decisive charac-

teristics of a nation that allow its firms to create andHowever, this focus on regional export shares as a


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Regional Competitiveness: An Elusive Yet Key Concept? 993

sustain competitive advantage in particular fields. As aggregate regional output figures, and such measuresMichael Porter, one of the prime exponents of this provide valuable information on a regions standardnotion, and indeed the doyen of the whole competi- of living, both through time and relative to othertiveness debate, puts it: regions. But although regional productivity is certainly

a useful indicator of what might be termed revealedI believe that many policy makers, like many corporate

regional competitiveness (G et al., 2004),executives, view the sources of true competitiveness there are empirical problems in measuring it accuratelywithin the wrong framework. If you believe that competi-tiveness comes from having cheap capital, and low cost (K , 2004) as well as conceptual issues aboutlabour, and low currency prices and if you think that how to interpret what is actually meant by regionalcompetitiveness is driven by static efficiency, then you productivity. All of the problems associated with mea-behave in a certain way to help industry. However, my suring and interpreting national or sectoral productivityresearch teaches that competitiveness is a function of

carry over the regional case. Thus, should one focusdynamic progressiveness, innovation, and an ability to

on labour productivity (possibly adjusted to take intochange and improve. Using this framework, things that

account the number of hours worked) or on total (orlook useful under the old model prove counterproductive.multifactor) productivity (TFP)? Additional problems(P , 1992, p. 40)include the output indicator used, which at the regional

For Porter, the only meaningful concept of competi-level also raises the issue of residence- versus workplace-

tiveness is productivity. The principal goal of a nation isbased measures. There is the difficulty of measuring

to produce a high and rising standard of living for its the output of services and the government sector. Thecitizens. The ability to do so depends, according to

estimation and interpretation of regional TFP are evenPorter, not on the fuzzy and amorphous notion of

more problematic: TFP requires data that are rarelycompetitiveness, but on the productivity with which

available at the sub-national scale, and the estimationa nations resources are employed. A rising standard of

of regional production functions that are themselvesliving depends on the capacity of a nations firms to

contentious. In addition, productivity on its own isachieve high levels of productivity and to increase

only one aspect of revealed regional competitiveness,productivity over time. Sustained productivity growth

or competitive advantage. What also matters is therequires that an economy continually upgrades itself.

regional employment rate. The ability to sustain aSimilarly, K (1990, p. 9) also argues that if

high rate of employment amongst the working-agecompetitiveness has any meaning, then it is simply

population is as important as having a high output peranother way of saying productivity:

worker. Although the two usually go together, a focusProductivity isnt everything, but in the long run it is

just on the latter can be misleading. Examples aboundalmost everything. A countrys ability to improve itsof regions in which firms and industries have sought

standard of living over time depends almost entirely onto raise labour productivity through the extensive

its ability to raise its output per worker.shakeout of workers and closure of plants, that is

The focus on productivity is apparent throughout the by reducing employment. But it would obviously beindustrialized world: for example, for the USA, see the perverse to view such regions as having improved theirC C (2001); for theU K, long-run competitive advantage if the cost of increasedsee D T I (DTI) labour productivity is persistent high unemployment.(1998, 2003b, c), H. M. T (2000) and Beyond these issues, useful though regional produc-B (2001); and for Europe, see E tivity analyses might be and even these are not thatC (2003) and OM and V A common they tell us little about the meaning, sources(2003). Furthermore, the preoccupation with pro- or processes of regional competitive advantage (Bductivity is now firmly focused on the region: for the and H, 2004; T , 2004). If Porter is correctUSA, see P (2001a, b); for the UK, see H . M. that competitive advantage is a highly localized process,T (2001, 2003) and DTI (2003a, 2004); and

then this requires further elaboration for it suggests thatfor Europe, see S et al. (2004). Indeed, one aspect

there is something distinctive and formative aboutof Porters productivity approach to competitiveness is

regional and local economic development: that theof particular interest: namely, his argument that com-

regional economy is more than just the sum (or aggre-petitive advantage is created and sustained through a

gate) of its parts.highly localized process (P, 1990, p. 19; also

As C and S (2002) argue, the notion ofP, 1998a, 2001b). In fact, in recent years, his

regional competitiveness or to use our terminology,focus has shifted away from the competitive advantage

regional competitive advantage is neither macro-of nations to the competitive advantage of regions.

(national) nor micro-economic (firm-based). Regionsare neither simple aggregations of firms, nor are they

TH E COMP E TITIVE AD VANTAGE OFscaled-down versions of nations. These authors go on

R E GIONS?to suggest that competitiveness takes on a differentmeaning according to the scale or level at which theIt is certainly possible to derive measures of regional

productivity either from firm-based micro-data or from term is being used. Thus, they distinguish between the


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macro level (the competitiveness of a country), the Porters cluster concept, in which regional competi-micro level (the competitiveness of the individual firm) tive advantage derives from the presence and dynamicsand the meso level (the competitiveness of local eco- of geographically localized or clustered activities among

nomic systems), where the latter is further divided into which there is intense local rivalry and competition,industrial districts (or what Porter would call clusters) favourable factor input conditions, demanding local

and regions. They suggest that the regional level is customers, and the presence of capable locally basedpossibly the most difficult and complex one at which suppliers and supporting industries. The more localizedto define competitiveness. They acknowledge that it are these industrial/business clusters, he argues, themeans much more than the potential ability to export more intense the interactions between these four com-or the surplus in trade balance, and that it reaches far ponents of the competitive diamond and the morebeyond the production of goods to include a wide productive the region.range of material and immaterial inputs and their According to Porter, a key aspect of cluster formationmobility, from housing and infrastructure to communi- and success and hence of regional competitive advan-cations to social networks. Beyond this, however, they tage is the degree of social embeddedness, the exist-fail to provide much insight. ence of facilitative social networks, social capital and

C (2002) offers a much more useful discus- institutional structures (P , 1998a, b, 2001a, b).sion. He takes the view that regions do indeed compete, The formation and evolution of such soft externalitiesover attracting firms (capital) and workers (labour), as is seen as crucial for the dynamic competitiveness ofwell as over markets, but based on absolute advantage regions and cities. In economic geography, Storpersrather than comparative advantage. According to not dissimilar notion of untraded interdependencies Camagni, a region may be thought of as having absolute such as flows of tacit knowledge, technological spill-competitive advantages when it possesses superior tech- overs, networks of trust and cooperation, and localnological, social, infrastructural or institutional assets systems of norms and conventions is also regarded asthat are external to but which benefit individual firms central to understanding the economic performancesuch that no set of alternative factor prices would and competitive advantage of a region (S ,induce a geographical redistribution of economic 1995; P, 2004).activity. These assets tend to give the regions firms, There is in fact an increasing tendency to explainoverall, a higher productivity than would otherwise be regional growth and development in terms of suchthe case. A similar view has been expressed by the soft externalities. In particular, considerable emphasisE C (1999, p. 5): is now given to local knowledge, learning and creativity

(P et al., 2003; M , 2004). The argument[The idea of regional competitiveness] should capture

is that in a globalized economy, the key resources forthe notion that, despite the fact that there are strongly

regional and urban competitiveness depend on localizedcompetitive and uncompetitive firms in every region,

processes of knowledge creation, in which people andthere are common features within a region which affectfirms learn about new technology, learn to trust eachthe competitiveness of all firms located there.other, and share and exchange information ( M,

2004). Indeed, an assumed link between localizationThe question is: what are these common features andand tacit or informal, uncodified knowledge is nowwhat makes them specifically regional in nature? Onealmost accepted axiomatically (P et al., 2003).way of thinking about these question is in terms ofWhile problems abound in all these discussions (onregional externalities, or resources that reside outsidethe cluster concept, see, for example, M andof individual local firms but which are drawn on S, 2003), one point is clear: that the definitiondirectly or indirectly by those firms and which

and explanation of regional competitive advantage needinfluence their efficiency, innovativeness, flexibility andto reach well beyond concern with hard productivity,dynamism: in short, their productivity and competitiveto consider several other and softer dimensions ofadvantage.the regional or urban socio-economy (Fig. 1). TheThere is now a considerable literature, within bothquality and skills of the labour force (human capital),economic geography and economics, that emphasizesthe extent, depth and orientation of social networksthe distinctive role of regions and cities as sources ofand institutional forms (social/institutional capital), thekey external economies. This interest is in fact part ofrange and quality of cultural facilities and assets (culturala more general recognition of the role of geography ascapital), the presence of an innovative and creative classa source of increasing returns, and the rediscovery(knowledge/creative capital), and the scale and qualityand extension of A Ms (1890/1920)of public infrastructure (infrastructural capital) are alloriginal triad of external economies of industrial local-just as important as, and serve to support and underpin,ization skilled labour, supporting and ancillary indus-

in the form of regional externalities, an efficienttries, and knowledge spillovers all held together byproductive base to the regional economy (productivewhat he called something in the air or industrial

atmosphere. Marshalls schema forms the basis of capital). For example, the ability of regions to attract


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Fig. 1. Bases of regional competitive advantage

skilled, creative and innovative people; to provide high- parlance of the productive performance of the coun-trys regions, cities and local authority areas. Five suchquality cultural facilities; and to encourage the develop-

ment of social networks and institutional arrangements drivers have been singled out in relation to policies at

the regional level: skills, enterprise, innovation, com-that share a common commitment to regional prosper-

ity, are all key regional externalities or assets that petition and investment (H . M. T, 2001,2004) (Fig. 2). In the case of urban competitiveness,benefit local firms and businesses, and hence are major

aspects of regional competitive advantage. the list of drivers is somewhat different: innovation,human capital, economic diversity and specialization,This is not to assume, however, that such externalities

all operate at the same spatial scales, or that they can connectivity, strategic decision-making, and quality of

life factors (ODP M, 2003, 2004). Why the driversbe nurtured or developed equally across all parts of a

regional economic space. On the contrary, one of the underpinning urban competitiveness should differ from

those underpinning regional competitiveness is notmost pressing research questions concerns the appro-

priate spatial scale at which to measure and analyse explained when some of those listed for cities would

seem just as relevant to regions.regional competitiveness. Do different externalities

operate over different geographical scales? How do The broad rationale for government intervention in

relation to these drivers is to overcome the market andthey interact across space? We actually know surpris-

ingly little about such issues. Yet they are of critical institutional failures that restrain their contribution to

the growth of regional productivity. Thus, accordingimportance given the need to ensure that policy inter-

ventions to improve regional competitiveness are mean- to H. M. T (2004, p. 14):

ingful and effective. there are important implications for the design and deliv-ery of regional policy in two respects. First, it is essential

that a comprehensive package of policy instruments be inP O L I C Y I S S U E S

place to strengthen each of the five drivers throughout

the UK. Failure to do so would undermine effortsIf there is no generally accepted definition or theoryto strengthen individual drivers and overall economicof regional competitiveness, this has not stopped policy-performance. A regions economic underperformancemakers from devising policies designed to boost thecould be perpetuated if, for example, policy makers failedcompetitiveness of this or that region or city. Just asto recognise the importance of a strong local skills base

productivity has been used as the dominant indicatorto the attraction and growth of new businesses. Secondly,

of revealed competitiveness, so it has tended to be ait is vital that there is a coordinated approach to the

prime target for policy intervention. The UK illustrates design and implementation of policies designed to raisethis tendency well. Over the past few years, the UK regions productivity and growth. . . . There will be bene-

Treasury, the DTI and the Office of the Deputy Prime ficial synergies from a coordinated effort to strengthen allMinister, have all sought to identify the underlying of the drivers that may be holding back a particular

regions growth.determinants or drivers to use the fashionable policy


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Fig. 2. Drivers of regional productivity used in UK regional competitiveness policy.Source: H. M. T (2004).

One problem with this approach is that there appears in approach, and little attention is given to the demand

side (F, 2004). It is as if a sort of Says lawto be no underlying coherent theoretical justificationfor the particular choice of drivers. At best, different of regional competitive advantage is being invoked: if

all the drivers are in place, then demand for the regionstheories seem to be implicit in different drivers. Thedifficulty here, of course, is that several different candi- products and services should follow. As Porters work

has emphasized, demand for a regions products is notdates are available as theoretical underpinnings forconceptualizing and devising policy interventions to simply an end result but is itself an important driver of

a regions competitive advantage. A low level of localpromote regional competitive advantage, and all havetheir limitations. Standard regional export-base theory demand tends to dampen local innovativeness and entre-

preneurialism, encourages the exodus of skilled andoffers far too narrow a view of the nature and determi-

nants of regional competitive advantage. Likewise, educated workers in search of better employment pro-

spects elsewhere, hinders the development of high-standard regional growth theory, with its dependence

on the idea of a regional production function subject quality cultural and infrastructural capital, and generally

weakens the competitive dynamics of the area. Tacklingto constant returns to scale, is of very limited usefulness.

Much more promising are those approaches that the supply side is certainly necessary to foster growth

and development, but may not of itself be sufficient.emphasize the importance of increasing returns, since

these at least allow for consideration of what was Action may also be needed to help stimulate local

demand (on the importance of markets, see Ctermed above regional externalities. But even herethere is a wide choice: from regional versions of et al ., 2004). In this context, favourable macro-

economic conditions and policies are also important.endogenous growth models (M and S,

1998), through the spatial agglomeration models of the A third limitation is the universalism of manypolicies aimed at boosting regional or urban competi-so-called new economic geography (F et al.,

1999; F and T, 2002; B et al., tiveness, whereby it is assumed that the same driversare equally important everywhere, and hence the same2003), cumulative causation models (S ,

1998), evolutionary theories (B , 2004), to basic policy model is applicable, the idea being that, in

principle, the process of regional economic growth iscluster theory (P , 1998a, b, 2001a, b). In the

UK, there has certainly been more than a whiff of governed by a series of universal economic rules (on

the limitations of such universalism, see K andendogenous growth theory behind Treasury thinking

in this area, while within the DT I Porters cluster W , 2001); thus, if you pull the right levers,the drivers will respond in similar ways with similartheory has been highly influential both in focusing

on regional productivity as the key indicator of regional outcomes. But both history and geography will have a

major impact on the relevance of particular drivers andperformance and in advocating the promotion of

clusters as an integral component of regional strategies. their impact. Thus, investing in innovation (assumingsuch an investment could be adequately defined) mayAnother problem is that policies both in the UK

and elsewhere tend to be overwhelmingly supply-side have beneficial effects in one region but have little


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impact in another. In the absence of a robust theoretical improving regional competitiveness: indeed, social

framework that takes account of spatial specificity, it is cohesion should rank equally with productivity andhard to gauge how policy initiatives targeted on any employment in any notion of regional competitiveone specific driver contribute to final outcomes, how advantage.the policy drivers work together, what relative weight

should be applied to each, and the time it takes for C O N C L U D I N G C O M M E N Tchange to occur.

Yet a further problem is that alluded to above: The issue ofregional competitiveness is thus ripe withnamely, that there has been little research into what theoretical, empirical and policy debate. In an era ofthe appropriate spatial scale of intervention should be. performance indicators and rankings, it is perhapsSome processes of regional competitive advantage may inevitable that regions and cities should be comparedbe highly localized, while others may operate at a more against each other in terms of their economic perfor-broad regional scale, and some may be national or mance. Such comparisons can serve a useful purposeglobal. In most instances, however, polices are pursued in that they point up the fact that, and call for explana-on the basis of predefined administrative or political tions of why, regions and cities differ in economicareas that may have little meaning as economically prosperity. But, to adapt Krugmans criticism of thefunctioning units, and from which policy effects may idea of national competitiveness, it is at best potentiallyleak out into other regions. At the same time, by misleading and at worst positively dangerous to viewfollowing similar strategies (based on similar drivers) regions and cities as competing over market shares as ifdifferent regions may end up competing one with they are in some sort of global race in which there areanother over a particular form of growth and develop- only winners and losers. This is not to deny thement that has a very specific and geographically importance of competition. In economic life andrestricted form, as in the case, for example, of certain beyond, competition is one of the fundamental sourceshigh-technology activities. Thus, many regions crave a of mobilization and creativity. But there are structuralbiotechnology cluster as a key element to boost their limits to, and negative consequences of, excessiveregions competitive performance. Yet not only do few competition as construed in narrow adversarial marketregions have any potential competitive advantage in terms (G L, 1995). Crucially, it isthis activity, arguably it is a sector that thrives most important to distinguish between competition andwhen concentrated in a limited number of large competitiveness.clusters. In other words, not every region can have a As the papers in this issue make clear, if the notion

major biotechnology industry cluster, and for each to of regional competitiveness has meaning and value, itattempt to nurture such a cluster of its own may is as a much more complex and richer concept; andsimply result in the failure to develop a strong national one, moreover, that focuses more on the determinantsbiotechnology sector at all. The same argument may and dynamics of a regions (or citys) long-run pros-well apply to other new economy type activities, such perity than on more restrictive notions of competingas information and communication technologies (ICT),

over shares of markets and resources. It is one thatcreative media, nanotechnology and the like. In short,

recognizes that ultimately competitive regions and citiesthere is no one-size fits all regional competitiveness

are places where both companies and people want topolicy (on this, see also L , 1999).

locate and invest in. We are far from any agreedTo compound this problem, and again related to the

framework for defining, theorizing and empiricallyquestion of what the appropriate scale of intervention

analysing regional competitive advantage. But givenshould be, there is the issue of whether and how far

the current fashion for notions of regional and urbanpolicy should focus on particular localities within the

competitiveness in policy circles, the need for such aregion rather than on others. Is the best strategy one framework is all the more urgent. Without such athat focuses policy interventions and resources in just

framework, policies lack coherent conceptual and evid-one or two growth zones (such as the major urban

ential foundations, and policy outcomes may as aagglomerations or selected localized clusters)? If so, to

consequence prove variable and disappointing. Thewhat extent will any improvements in competitive

notion of regional competitiveness requires informedperformance spread out into other parts of the regional

debate: the papers that follow are intended as contri-economy more generally? In other words, the focus on

butions to this task.regional competitiveness should not ignore or neglectissues of intra-regional inequality. As the European

Commission has recognized, social cohesion (the Acknowledgements The authors thank two anonymousreduction of spatial socio-economic inequalities) should referees for comments on an earlier version of this paper.

The usual disclaimer applies.be an integral component of any policy aimed at


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