Robin Murray

Urban and regional policy

Urban and Regional Policy

 
 

In the late 1980s and early 1990s, Robin continued to work on post Fordism, new forms of public administration, and regional economic development. This was quite a pivotal moment for regional policy in Europe; the context for regional policy had shifted quite dramatically in the preceding decades and the creation of the Single Market in 1992 was to have a profound impact on the regions. 

At the beginning of 1988, Robin was involved in the OECD Labour/Management Programme which convened a meeting of trade union representatives to examine ‘new demands on urban policy’. Under discussion was the changing economic and social landscape, most notably: new challenges facing the inner cities, the ageing of OECD's populations, changes in social values, economic restructuring and the introduction of new technologies at home and in the workplace. In this context, new types of urban services might be necessary, existing infrastructures might need to be replaced or modified, the location preferences of people and firms might change. This meeting was, therefore, organised to discuss the need to anticipate the impacts of these changes and to evaluate the necessary policy adjustments. Robin was designated as General Rapporteur for the session and subsequently produced a report of the discussion.

Soon after, he was commissioned by the Agenor Research Unit in the Commission of the European Communities in 1990 to examine this changing context of regional policy in Europe, review the pioneering initiatives undertaken by various regional and municipal governments in the 1980s to support their local economies, and to make recommendations for regional policy in light of this experience. The initial research paper (May 1990) was then published by CLES/SEEDS in 1991 as Local Space: Europe and the new regionalism and a shortened version was published as an article in Mick Dunford and Grigoris Kafkalas’ book, Cities and Regions in the New Europe: the global-local interplay and spatial development strategies (1992) (typescript available here) 

In these publications, Robin traces the vacillating landscape for regional policy. From the mid 1960s, there had been a marked shift towards the ‘ruralisation of industry’ as manufacturing moved from large cities to greenfield sites, or to less developed or depressed regions, and from the 1970s onwards to the peripheral areas of Europe and the developing world. As industry was pushed out to the peripheries, new core economies emerged. These reflected the reorientation within industry from manual production to knowledge intensive industries based on innovation, design, marketing and long-term strategy.

Moreover, these knowledge-based industries tended to emerge in specific districts or geographical clusters, with profound implications for labour markets. These industries are typically dependent on highly skilled professional or creative labour. Labour is drawn to these clusters in the search for jobs; and firms are similarly tied to those clusters since they are reliant on the talent pools based in those locations.  Robin explains how this process of ‘cumulative causation’ systematically drained peripheral regions of skilled labour during the 1970s and 1980s. So, in this sense, a spatial hierarchy still existed, but instead of there being inter-sectoral spatial divisions of labour, there had been, since the 1960s, intra-sectoral ones where different regions specialised in different parts of the same industry.

A further change in context for regional policy was the progress of Europeanisation, set to accelerate in the 1990s with the advent of the single market in 1992. At the time, and rather prophetically, Robin argued that the consolidation of the single market promised to affect regional policy in various ways: “Harmonisation weakens the protection and preferences that governments can give to particular regions; it reinforces the emergent spatial hierarchies through closer integration of the new core [economies]; and by further freeing markets and capital mobility it induces an incentive competition between regions and localities whose ultimate beneficiaries are the investors, and whose ultimate costs are borne by the exchequers.” At that time, Robin was already writing about how multinationals had been able to bid governments and regions off one another, in such a way that they had exerted a downward pressure on the level of wages and the labour contract, and had provoked a war of incentives which had reduced the rate of public return from any given large scale footloose investment. 

Another part of this changing landscape was the increasingly glaring divide within as well as between regions. High levels of deprivation, poverty and unemployment characterised inner cities throughout the 1970s and 1980s, even while other parts of those same cities were enjoying significant growth – particularly after the deregulation of financial markets from 1983 onwards. It was in fact the recessions of the 1970s and 1980s, which accelerated the process of de-industrialisation of many ‘smoke-stack’ and ‘rust-belt’ areas, and which had led to soaring rates of unemployment, which had prompted various regional and municipal governments around Europe to experiment with new forms of public intervention in economic development.

As Robin explains in Local Space: Europe and the new regionalism, one of the striking features of this period is that the most successful European regions – such as Baden Württemberg in West Germany, or Emilia Romagna in Italy- had municipal and regional governments playing an important economic role within them. Moreover, these examples showed that ‘diffused industrialisation’, namely industrial districts consisting of networks of small and medium sized firms, provided an alternative path for regional strategy: 

 
 

“The streets, shops and factories of Bologna, Modena and Carpi show that diffused industrialisation is a material option for industrial and regional strategy…There are similar regions elsewhere in Europe - in the Baden Württemburg area of Germany, where Mercedes Benz and Bosch have provided a focus for small and medium firm networks, particularly in the engineering industry. In Jutland the growth of specialist high quality producers like Lego, Danfoss and Bang and Olufsen have combined with a strong co-operative tradition to produce a diffused growth in a region marginalised by mass production.”

 
 

In these cases, local and regional governments had played a critical role in supporting ‘diffused industrialisation’ by fostering networks and providing common services. Robin examines ten features of local economic strategy which were particularly effective in promoting regional development. These included for example, development banking, consortia and Centres of Real Services, sector strategies and democratic planning and support for cultural industries amongst others. 

And what of the implications for regional policy in the 1990s? For Robin, changes in production from Fordism to flexible specialisation and their spatial ramifications suggested new directions for regional policy. First, it called for measures which encouraged the development of ‘counter cores’. In the UK, for example, this meant strengthening the North as a counterpoint to the South East (this is the idea behind the Northern Powerhouse). There was also a key role for agencies such as development banks to act as system ‘pioneers’ and ‘animators’ in accelerating the shift from Fordist forms of production to flexible specialisation.

For Robin, the process of globalisation had moved a lot of the traditional national state functions to the European level, and that many of the key forms of economic policy were then best conducted at a local and regional level, supported by the national. However, measures to advance ‘diffused industrialisation’ needed to take into account context, infrastructure and finance. This in turn required new forms of public administration, away from the highly centralised, bureaucratic Weberian model to something more “flexible, fractal and discretionary”.  Ultimately what was required was something in form, which was small in size but well networked, decentralised, pluralistic and with a focus on ‘formation’ to ensure that staff had the necessary (and complementary) skills and a common outlook.   

Following this and the work he was doing with IDS, Robin visited South Africa in January 1992, at the invitation of the ANC, to lecture to township leaders on the international economy, and regional economic development. He subsequently spent two days with Planact – the principle NGO advising civil society organisations – discussing regional economic policy and the place of local and regional government in economic development. He returned in July of that year to work with Planact on structures for local and regional government in the post-Apartheid period. The result of these discussions was written up as a Guide to The Theory and Practice of Local Economic Development.