Economic Geography

Section III
Regional competitive
advantage
Industrial change, human capital 
and public policy

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13 Economic geography and the
new discourse of regional
competitiveness
Ron Martin
The new discourse of competitiveness
Although it may have had some earlier predecessors (see Reinert 1995), the term
‘competitiveness’ is really only a recent one. It entered general economic parlance
in the mid 1980s, mainly through the writings of business school gurus, especially
Michael Porter. But since then it has become a prominent, even hegemonic,
discourse amongst policymakers the world over. Economists and experts every-
where have elevated ‘competitiveness’ to the status of a ‘natural law’ of the modern
capitalist economy, and assessing a country’s competitiveness and devising policies
to enhance it have rapidly become officially institutionalised tasks.
What explains this new concern with competitiveness? There is little doubt
that the popularity of the notion in policy circles is inextricably linked to the
ascendancy and diffusion of pro-globalisation, pro-market neoliberal political
ideologies among the advanced nations and many of their leading economic advi-
sors. Under this credo, globalisation is not only an ineluctable process, it brings
with it expanding trade and increasingly intense competition between firms and
between nations (the ‘threat’ from India and China being increasingly invoked in
this context), necessitating the pursuit of efficiency, flexibility and technological
innovation in order to compete and survive in the global marketplace:
A new era of competition has emerged in the last twenty years, especially in
connection with the globalization of economic processes. Competition no
longer describes a mode of functioning of a particular market configuration
(a competitive market) as distinct from oligopolistic and monopolistic markets.
To be competitive has ceased to be a means to an end; competitiveness has
acquired the status of a universal credo, an ideology.
(Group of Lisbon 1995: xii)
This new focus on competitiveness is by no means the sole preserve of 
neoliberal apologists, however; the belief that economic life in today’s globalised 
and technologically-driven world is distinctly more ‘competitive’ has in fact gained
widespread acceptance, even in left-of-centre political circles. The difference is

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that in the latter, ‘competitiveness’ (like globalisation) is often seen in a negative
light, as an ultimately self-defeating imperative, whereas for the neoliberal it is a
positive, indeed necessary feature of the free-market order.
An intriguing feature of this new discourse of competitiveness is that whilst
initially a national-level concern, it has also stimulated considerable interest in
regions and cities. One expression of this is a new policy emphasis on the ‘regional
foundations’ of national competitiveness. In the United Kingdom for example,
the Blair governments have repeatedly stressed the need to raise the competitive-
ness of the country’s regions and cities in order to improve the nation’s economic
growth and productivity. Similarly, the European Commission sees the improve-
ment of regional competitiveness across the Union as vital if it is to secure the goals
set down in the Lisbon Agenda (of making the European Union the most dynamic
knowledge-based economy by 2010):
If the EU is to realise its economic potential, then all regions wherever they
are located . . . need to be involved in the growth effort . . . Strengthening
regional competitiveness throughout the Union and helping people fulfil
their capabilities will boost the growth potential of the EU economy as a
whole to the common benefit of all.
(European Commission 2004: vii–viii)
Likewise, in the United States, research bodies such as the Washington-
based Progressive Policy Institute and Harvard’s Institute for Strategy and
Competitiveness, have highlighted the importance of high-performing regions
and cities for the competitiveness of the national economy. This new-found focus
on regions and cities reflects a belief, again linked especially with neoliberal
thinking, that the pursuit of ‘competitiveness’ requires close attention to the
microeconomics of supply, and to the need to remove supply-side rigidities,
barriers and related weaknesses in the economy. And this in turn, has promoted
greater interest in regions and cities, where, it is believed, many supply-side prob-
lems reside and where policies aimed at their removal are best delivered and
implemented.
At the same time, many regional and city authorities have themselves become
increasingly concerned about the relative ‘competitive standing’ of their local
economy compared to that of other regions and cities, and with devising 
strategies to move their area up the ‘competitiveness league table’. Regional
‘benchmarking’, constructing rankings of regions and cities by this or that
‘competitiveness index’, has become a widespread practice. As globalisation 
has advanced, and nation-states have redrawn and withdrawn their spheres of
economic intervention and regulation – or even lost some of their economic
sovereignty to the onward march of globalising forces – so regional and city
authorities see their local areas as both more exposed to the global economy and
with greater autonomy to carve their own future within it. Comparing themselves
with other ‘competitor’ regions and cities elsewhere has thus become one way of
assessing their performance, their strengths and weaknesses.
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Ron Martin

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All this resonates closely with the claim by many geographers (and others
besides) that we are witnessing a (re)surgence of regions and cities as the loci of
wealth production and economic governance in the world economy (see, for
example, Best 2001; Ohmae 1995; Scott 1998, 2001; Storper 1997). How we
conceptualise the regional and urban competitiveness is thus highly relevant to
this alleged reassertion of regions, and economic geographers should, in principle,
be well placed to provide some valuable insight. For the notion of ‘place-’ or
‘territorial-competitiveness’ would seem to be closely linked to what, traditionally,
has been a central issue for economic geographers: namely, the pervasive phenom-
enon of geographically uneven development.
Yet, the idea of regional competitiveness is a contentious one, a notion around
which there is no general consensus. Indeed, as Bristow (2005) puts it:
Regional competitiveness lacks a clear, unequivocal and agreed meaning
within the academic literature. It is perhaps not surprising therefore that the
policy discourse around regional competitiveness is somewhat confused. 
(p. 289)
In fact, at the heart of this confusion are several questions. What, precisely, is
meant by the term ‘regional competitiveness’? In what sense do regions and
cities compete? Are regions and cities meaningful economic units to which the
notion of competitiveness can be meaningfully applied? Why should regions and
cities differ in competitiveness? What are the policy implications of regional and
urban differences in competitiveness? Policy concerns with urban and regional
competitiveness have run ahead of answers to these and related questions. A substan-
tial research effort would thus seem to be called for to redress this imbalance and
provide a firmer base for policy debate.