EUKN - European Urban Knowledge Network - Globalisation and Regional Economies: Can OECD Regions Compete in Global Industries?

Globalisation and Regional Economies: Can OECD Regions Compete in Global Industries?

Introduction

Despite concern about the negative impacts of globalisation on the economies of OECD regions, notably the loss of manufacturing jobs and enterprise relocation, the report 'Globalisation and Regional Economies: Can OECD Regions Compete in Global Industries?' presents evidence that region-specific advantages – embedded in specialised firms, skilled labour and innovation capacity – remain a significant source of productivity gain for firms, even for the largest multinational enterprises. This seems to contradict the hypothesis that globalisation reduces the importance of geographical proximity in business.

Description

Economic geography in an era of global competition involves a paradox. It is widely recognised that changes in technology and competition have altered many of the traditional rules that determine location of economic activity, making it possible for firms to access the inputs and knowledge that they need from anywhere across the globe. Yet specialisation and concentration remain striking features of regional economies in the OECD. For example, many of the leading firms in "new economy" industries have tended to cluster together.

This report argues that some long-term trends will over time change how economic activities are distributed both within countries and across the globe. Some of the key drivers of this process include:

Increasingly complex global production networks that link global brand leaders, contract manufacturers and specialised component producers;
Extension of offshoring of manufacturing from industries such as textiles and ICT in which Asia has already become the “global factory” to high-tech industries and to new segments of the production process;
Fundamental changes in corporate strategies, giving rise to more open and networked corporate innovation systems with strong region-level and global dimensions;
Innovation offshoring leading to the emergence of R&D clusters in non-OECD countries.

There is evidence that a new geography of production is emerging, based around both old and new regional hubs in OECD and non-OECD countries. Some of the new hubs in non-OECD countries are attracting increasingly high value-added production and services.

These trends have important consequences for policy makers. These relate both to how to attract and retain key investments in their current locations, and how to build on existing locational advantages. In response, national and regional governments in OECD countries are looking for ways to ensure that regions maintain a competitive edge in industries that generate wealth and jobs.

This report looks at how different regions specialised in one of three major global industries (auto, biopharma and ICT) are responding to these challenges and the strategies they have adopted to support existing competitive advantages and to transform their assets to develop new competitive strengths.

A principal message from this research is that OECD regions can compete in key industries on the basis of region-specific assets, even in industries that are characterized by intense international competition.

Source: OECD

Contact info

OECD
Paris
Phone: +33-145 24 82 00
gov.contact@oecd.org

Publication date

/10/2007

Article info
Organisation: OECD

Links

Click here for more information or to order the report

Document type

policy

Themes

Urban Policy > Economy knowledge & employment > Urban economy

Keywords

Competitiveness