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The Higher ED Blog: What’s new in economic development research (winter 2017)

Michelle Madden / January 16, 2017

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The Higher ED Blog: What’s new in economic development research (winter 2017)

The Higher ED Blog publishes a quarterly economic development research roundup that shares new research practitioners might find useful. The series draws from Economic Development Quarterly, Regional Studies, the Journal of Rural Studies, and other reputable peer-reviewed academic journals.

Policy is a critical part of growing a green economy

Local and regional governments are recognizing the benefits of building a green economy, both in terms of economic and environmental impact. A recent study from the United States explored the underlying catalysts of green industry development, and whether policy or market factors played the greatest role.

The researchers considered this question in the context of Texas, a state that imposes minimal regulation in favour of free market activity. They compared green and non-green firms and considered such possible influencing factors as agglomeration effects, average income, presence of a research centre, land prices, and cultural and natural amenities (for their talent attraction potential).

They found no strong market effects on green industry entry, growth, and exit. They were surprised to find that regional income was not a significant factor, despite expecting green firms to locate in more prosperous areas (where residents may demand higher environmental quality or have stronger principles around sustainability). They did find evidence that pre-existing industrial agglomeration contributed to attraction and growth, but the same effect applied to non-green firms as well. Since market factors seem to have little influence, they conclude that regions interested in developing a green economy should create policy to attract green firms, rather than wait for them to start up organically.

Read more: Entry, growth and survival in the green industry, Regional Studies, Published online: 24 Nov 2016.

Do artisan food producers find value in government innovation networks?

While farming has been a backbone industry of Canada for centuries, artisan or specialty food is an emerging branch that economic developers are paying more and more attention to. Niche producers are creating locally embedded, high value-added products, and often in rural communities where the economic boost is especially appreciated. However, a rural location often means that the producers are more reliant on local markets and less likely to learn of and adopt innovative practices gained through networking with peers within their sector. Governments and other institutional actors may be able to bridge this gap and encourage greater innovation.

This study, conducted in Northern Ireland, sought to find out how artisan food enterprises engage with institutional support networks for innovation. Through formal and informal discussions with 35 producers and 25 institutional actors, and participant observation over three years, the researchers observed how the producers networked with a variety of actors.

Unsurprisingly, they discovered strong social networks between local businesses. These networks, often overlapping with family and friend networks, showed significant knowledge sharing and demonstrated several examples of radical innovation. They also drew knowledge and inspiration from business and leisure travel internationally. Ties to institutions were much weaker, raising questions about the effectiveness of institutional actors for regional innovation and development.

Engagement was restricted by not knowing how to access institutional networks, uncertainty about the value of those networks, and the institutions’ over-emphasis on export development (the artisan producers were either not ready for or not interested in growth). Government department actors with a broad regional economic development role tended to present information that was generic and not highly valued by the producers. They also wanted to actively spur innovation, but the producers were not looking for innovation opportunities from these networks. The producers who did engage in these networks found the most value in building connections with fellow participants, who provided emotional and business support and helped reduce feelings of rural isolation.

The researchers had several recommendations for actors at the regional government level to increase engagement among producers. They suggest communicating the network’s objectives more clearly and managing expectations on what kind of knowledge might come from the network. They also suggest placing a greater focus on bridging existing networks to encourage the creation of valuable informal connections.

Read more: Innovation networks and the institutional actor-producer relationship in rural areas: The context of artisan food production, Journal of Rural Studies, Volume 48.

Maximizing the economic benefits of high speed rail across the network

This last article is on a topic that’s years away—at best—from happening in North America, but one we’re fixated on anyway: high speed rail. Looking at networks in Europe and China, the researchers behind this study wanted to find out if high speed rail (HSR) reduces or increases the economic disparities between cities connected to the rail system, and if it changes their economic structure.

Focusing on the networks in Europe here (because it is closer to the North American context) the findings show evidence of economic growth, particularly in the knowledge economy, and convergence between the cities on the network after the introduction of HSR. The researchers even noticed convergence between cities on the network and those off the network, so long as the off-network cities had close economic ties to cities on the network and literal ties in terms of transportation infrastructure. As might be expected, some cities gained more residents as a result of HSR while others gained more businesses, depending on their existing assets.

Station placement was found to be a major factor in the frequency and type of use. The European HSR stations were usually placed in city centres with easy access to the host city and conventional rail connections to smaller centres. These easy connections made daily trips for commuting and business travel more feasible. By comparison, the stations in China were often placed at the edge of cities, making door-to-door travel onerous. As a result, few used the network for daily travel; weekly business trips were most common.

Even in a highly functional system, the study notes that maximizing the economic benefits of the connectivity requires cooperation above these transportation links. A regional body that involves actors from all cities in the network could encourage greater collaboration and ensure that inequalities are addressed.

Read more: Can transport infrastructure change regions’ economic fortunes? Some evidence from Europe and China, Regional Studies, Published online: 21 Dec 2016.

 

About the author

Michelle Madden is the editor of Higher ED. She is also the Outreach Manager for the Economic Development Program and a graduate of the University of Waterloo’s Local Economic Development program (now the Master of Economic Development & Innovation).  She has authored many Higher ED articles sharing information relevant to economic development practitioners. She has published several of her own blogs on economicdevelopment.org as well. Follow her on Twitter at @michelle_mad.

About the series

Higher ED: Insights for the Next Economy is a platform for students, guest speakers, staff and faculty of the University of Waterloo’s professional and graduate economic development programs to share knowledge with the field at large. The series takes works destined for an academic audience and reworks them into a fresh, easy-to-digest blog article.

Established in 1987, the Master of Economic Development and Innovation (MEDI) is one of the only graduate programs in Canada focused exclusively on economic development. Students learn economic development theory and practice, and are exposed to leading edge knowledge, tools, and approaches to address contemporary challenges in cities and communities across Canada and internationally.

The Economic Development Program is a nationally-accredited provider of professional training. It delivers certification programs and seminars that offer a deep understanding of the Canadian context in a convenient block format. Peer learning is combined with informative lectures and practical case studies to provide dynamic instruction that is beneficial for junior and senior-level practitioners.

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