Towards flexible structures

The key driver in regional development policies for two decades has been knowledge and 'know-how' based development built around regional strengths and competences. Each and every region has a long tradition – a genotype – of its development. Regions are born, grow and are layered during various phases of growth in trade, industry, public and finally private sector services.

One cannot have an influence on tradition but one can set the conditions for future development. The classic challenges to knowledge and development dynamics have been organisational thinness, often in the case of ex-rural areas; lock-in structures, often the case in industrial areas; or fragmentation, often the case in metropolitan areas. Local context, the unique setting of actors and unique dynamics lead to the need for tailored policies, indeed, as the OECD puts it "one size does not fit all".

In addition to endogenous factors key features for urban regions now include the ability to be involved in networks and to be regenerative. Locking into one structure has turned out to be sub-optimal. Networks provide the possibility to deepen specialisation and the division of labour between urban regions. Structural changes will inevitably come - the challenge is to prepare actors in urban regions to be able to adapt to change and to find their locus in globalisation (i.e. international competition), not to maintain current fixed structures.

Building networks and clusters has two territorial dimensions: one taking place within functional urban areas and regions and the other taking place in the 'spaces' between them. Integrating regional activities while maintaining sufficient European and national co-operation presents one of the greatest challenges to innovation-driven networking and cluster policy. Building networks and links between cities and regions challenges the traditional understanding that geographical proximity is a critical condition in forming a cluster.

In promoting competitiveness and innovativeness physical geography seems to matter either a lot or not at all. Building clusters is no longer only about local development or linking areas within an urban system. When building networks and clusters we are looking for similarities in terms of economic and competence orientation and then complementarities and thus an effective division of labour within that particular cluster. Links between urban areas and regions have been built primarily within national contexts since the early 1990s. It is now time to build networks and clusters internationally and thus to break hierarchies.

There is, however, no size-determination in building clusters: small and medium-sized cities and rural areas are very important especially in applying knowledge but also in innovation. Smaller regions are often more efficient and regenerative. By networking, the mass of regions is increased; economies of scale and of scope as well as synergies are created. All cities and regions must be afforded the possibility of being part of a network. The aim here is to promote the strengths and specialisations of smaller centres encouraging cooperation between such centres and ensuring that the network coverage is expanded to encompass all regions.

The general orientation here for the last two decades, in terms of development activity, has been 'bottom-up' and actor-based. The role of national players has however changed in recent years: they are increasingly now part of the bottom in the bottom-up development process – instead of being mere top-down dictators or part of the 'up' in the bottom-up process. In other words, instead of the hollowing out of the nation state, one can generalise that national players now have a major strategic role to play in helping to facilitate networks.

We are then on the way towards 'a geography of infinite possibilities' based on flexible structures. As such, it is up to capable regions to learn from networks and re-deploy this knowledge into regeneration processes, or should it in this context be called 'REKENEration'.

By Janne Antikainen, Regional Director for Regional Development