Regional Economics Lecture 4 Sedef Akgüngör

Some Suggested Websites for Your Interest (DPT bolgesel gelişme ana sayfası) Ege Ekonomiyi Geliştirme Vakfı (Global Competitiveness Report) (Global Competitiveness Report)

"The top rankings of Switzerland and the Nordic countries show that good institutions and competent macroeconomic management, coupled with world-class educational attainment and a focus on technology and innovation, are a successful strategy for boosting competitiveness in an increasingly complex global economy." Augusto Lopez-Claros, Chief Economist; Director, Global Competitiveness Network Augusto Lopez-Claros Augusto Lopez-Claros

Innovation as a key Pillar to Development

Innovation through Knowledge Sharing and Regional Development Depends on the relations of activities within a region: Depends on the relations of activities within a region: 1. Vertical relationships 1. Vertical relationships 2. Horizontal relationships 2. Horizontal relationships 3. Complementary relationships 3. Complementary relationships

Vertical Relationship Backward and forward linkages Backward and forward linkages Backward linkage: Purchasing of inputs, subcontracting. Backward linkage: Purchasing of inputs, subcontracting. Forward linkage: Transmission of the activity further along the sequence of operations. Forward linkage: Transmission of the activity further along the sequence of operations.

Horizontal Relationships The relation involve the competition of activities or units of activity The relation involve the competition of activities or units of activity

Complementary Relationships Forward linkage effect Forward linkage effect Backward linkage effect Backward linkage effect Mutual attraction among suppliers of complementary products. As additional producers come into region, they help the region to become the center of a certain/specific activity. Mutual attraction among suppliers of complementary products. As additional producers come into region, they help the region to become the center of a certain/specific activity.

Economies of scale and agglomeration Economies of scale and agglomeration Regional specialization Regional specialization

Learning Regions Silicon Valley: A global center for new technology. Enterpreneurs and technologists from around the world backed by global venture capital. Silicon Valley: A global center for new technology. Enterpreneurs and technologists from around the world backed by global venture capital. Tokyo, New York, London as financial centers of the world. Tokyo, New York, London as financial centers of the world. Los Angeles: Computer technicans… Los Angeles: Computer technicans… Italy: Designer of fashion goods. Italy: Designer of fashion goods. Los Angeles, Tokyo, Milan: Land of automobile desighers Los Angeles, Tokyo, Milan: Land of automobile desighers New industrial revolution in Taiwan, Singapore, Korea, Malaysia, Thailand, Indonesia New industrial revolution in Taiwan, Singapore, Korea, Malaysia, Thailand, Indonesia

Regions become more important modes of economic and technical organization. Regions become more important modes of economic and technical organization. Dynamics of individual regions. Dynamics of individual regions. The role of regions in the new age of knowledge intensive capitalism. The role of regions in the new age of knowledge intensive capitalism. Regions are key elements of the new age of global, knowledge based capitalism. Regions are key elements of the new age of global, knowledge based capitalism.

Integrated Economic System Transplant factories Transplant factories Multinational companies Multinational companies Transnational companies Transnational companies These are sources of productivity growth because: These are sources of productivity growth because: 1. The directly contribute to higher levels of domestic productivity 1. The directly contribute to higher levels of domestic productivity 2. Prove that leading edge productivity can be achieved with local inputs 2. Prove that leading edge productivity can be achieved with local inputs 3. Put competitive pressure on other domestic producers 3. Put competitive pressure on other domestic producers 4. Transfer knowledge of best practcices to other domestic producers through a natural movement of personnel. 4. Transfer knowledge of best practcices to other domestic producers through a natural movement of personnel.

Source: Florida, R. “Toward the Learning Region”. Futures 27(5):