0.1 Regions and clusters

Regions

This thesis sets out to explore the potential impact of harnessing “international collaboration” to the benefit of the participant regions. The emergence of the role of regions within national and international economies has become a field of increasing interest and importance (Karlsson 2007 and Ketels et al. 2008). This chapter explores the concepts of regions and clusters in the context of the facilitating the development of sustainable knowledge driven local economy and in particular the role of government policy in its facilitation.

Knowledge economy - global, european and uk global

As described earlier, the emergence of the knowledge-based economy around the world has been widely acknowledged at an international level, (OECD 1996 and Work Foundation 2006), and also increasingly so at national (DTI 2003 and Shapira et al. 2005) and regional levels. This has led to many countries large and small developing strategies to harness the opportunities of the Knowledge Economy, including nations as diverse as the US, UK (DTI 2004), New Zealand, Malaysia and Scotland (Scot Exec 2001).

Knowledge creation is a key driver of the Knowledge Economy and the United States is the world leader in this regard investing the most into the creation of knowledge; some $285bn annually. This compares with other leading nations as shown in [link] (OECD 2005).

Eu and uk

Developing the world’s strongest Knowledge-based economy has become a key goal for the European Union as launched at the Lisbon 2000 Council (Lisbon 2000 EU Council Strategy).

“ …to become the most dynamic and competitive knowledge based economy in the world ”

At a European level the disparities in economic performance between regions, even within countries, are highlighted by Figures compiled by the European Commission (EUROSTAT 2004) and shown in [link] . The United Kingdom provides the most striking example of this with Inner London generating GDP per capita at 288% of the EU average while at the other end of UK performance are the Isles of Scilly registering 65% (Wales Objective One region – 73%).

The leading regions are typically those including the capital city and this performance aligns with the intensity of knowledge-based activity as has been shown in Cooke and Clifton (2005). However, this measure serves to highlight one of the limitations of simple GDP measures. As ‘output’ location is recorded rather than ‘income’ region the apparent prosperity of regions can be misleading. For example, relatively few people live in Central London, though a huge amount of GDP is generated. Much of the wealth created in the capital flows out in pay packets to be spent in the commuter-belt. Wales experiences the same phenomenon, with workers flowing into the capital, many from the relatively poor Valleys, to create GDP that registers as an output of Cardiff.