Strategies for Shaping Territorial Competitiveness

As noted recently by Christian Ketels in his blog for the TCI Network, the issue of territorial strategy is currently extremely popular among regional policy-makers. In Europe this popularity has been stoked by the European Commission’s adoption of the smart specialization concept and insistence that all regions that want to receive structural funds related to innovation have in place a research and innovation strategy for smart specialization (RIS3). The debate is relevant more widely, however, as around the world today we see policy discourse dominated by territories – whether they be cities, regions, countries or cross-border regions – looking to develop, implement and monitor the progress of distinctive strategies to boost their competitiveness.

Despite this popularity, there is a strong sense in which policy practice is racing ahead of conceptual and empirical understanding in the academic sphere of what territorial strategy-making actually entails. Our recently published book on Strategies for Shaping Territorial Competitiveness aims to move forward academic understanding of territorial strategies, while explicitly recognizing that academic reflection must build from and work with the wealth of evolving practice. As Ketels argues in his blog, regional strategy is difficult, and we are at a moment when the academic and policy worlds need to collide more effectively so as to generate real improvements in how we ‘do’ territorial strategy for competitiveness.

As with corporate strategy, the central issue when it comes to constructing a territorial strategy is the choice around the type of socioeconomic activities that should be developed, both now and in the future. In this sense the debate around territorial strategy overlaps with literature on science and technology policy and with previous and currently re-emerging debates around industrial policy. Moreover, as with previous surges in interest in territorial strategy, current popularity has corresponded with a context of deep economic crisis in many parts of the world that renders making choices both more pressing and more difficult.

What is perhaps most challenging is that territorial strategies should articulate these choices in ways that address the multilevel and complex nature of each territory, where different goals, agents and interests co-exist in mutual dependence. This requires taking systemic or holistic approaches. In this regard, territorial strategy and indeed ‘new industrial policy’ should not be about the articulation of choices ‘top-down’ from government. Rather, it should be the result of diffused processes carried out among different agents and organizations within the territory; what in the smart specialization literature is referred to as processes of ‘entrepreneurial discovery’. Yet there remains a large gap in understanding around how these processes take place and how they can be articulated towards coherent strategies capable of shaping competitiveness in the specific contexts of different territories.

The book takes steps to bridge this gap in understanding by asking questions around what a territorial strategy is for, what it is, and how it happens. These are explored in abstract and then through reflections on a series of cases representing very different contexts in Argentina, Canada, Denmark, Spain, Sweden and the UK. The case analysis is particularly important because there can be no one size fits all strategy. In their very nature territorial strategies are context-, place- and path- dependent, which demands holistic approaches with long-term perspectives. Indeed a key finding is that the question of how territorial strategy takes place conditions what the strategy is and what the strategy is for. What is more, the question of how territorial strategy takes place always comes accompanied with related questions around when it takes place and who is involved.

As an example of the timing issue, we observe that territorial strategies have appeared mainly as government-led responses to external shocks or to economic crisis: in the early 1980s in the Basque Country (Spain), for example, and in the early 1990s in Wales (UK), Øresund (Denmark/Sweden) and Rafaela (Argentina). In each of these cases crisis was seen as an opportunity for change and to formulate a vision for the territory and a strategy to be developed. When these external shocks are absent, or the need for a strategy is not widely perceived – as for example in the Okanagan region of Canada – it takes much more time and effort to initiate the process. Returning to the current European debate around smart specialization strategies, we perhaps shouldn’t be surprised therefore that rapidly promoting a particular, structured approach to territorial strategy-making has led in some cases to governments scrambling around to demonstrate the existence of a strategy amidst considerable confusion around what that really means in their specific contexts.

The question of how territorial strategy should be formed in different contexts is a very difficult one precisely because it takes time to develop the required ‘dynamic territorial capabilities’, which ultimately are linked to people. In the cases of Rafaela and the Basque Country it was visionary politicians with a long-term horizon and sufficient political power who played an initial catalyst role, whereas in other spaces with weaker or fragmented institutional structures, such as the Okanagan or the Øresund, other actors in the university, business and civil society spheres assumed or are assuming that role. In particular the engagement and alignment of different territorial agents around common goals, and associated capacities for shared leadership, are revealed as critical in all these cases. Yet they take time, requiring significant learning and trust-building. Indeed, the cases of Rafaela and the Basque Country show that processes that started around the early 1990s did not begin to bear fruits until ten years or so later.

What, then, are some of the key elements that might guide how places look to learn in their pursuit of territorial strategies? Much more detail can be found in the book, but we would point especially to the following:

  • the ability to make the time-horizon of strategy independent – or partly independent – of the political cycle
  • the need to establish ‘spaces’ for dialogue and exchange of views and ideas
  • the importance of developing social capital among implicated agents
  • the evolution from individual leaderships to shared leadership
  • the significance of the ownership of the strategy being truly territorial, as opposed to pertaining to government or to any other unique agent

Moreover analysis in the book also highlights the roles that different forms of training and research can play in all of the above, and it concludes with a ‘call to arms’ to academics and academic institutions to be more engaged and involved in territorial strategy processes.

Jesus Mari Valdaliso, is Professor of History and Economic Institutions at the Faculty of Economic and Business Science at the University of the Basque Country (UPV/EHU).

 James Wilson, is Senior Research at Orkestra-Basque Institute of Competitiveness and Director of the Masters in Competitiveness and Innovation at Deusto Business School

James Wilson

James es Director del Departamento de Territorio, Innovación y Clústeres de Orkestra y profesor en la Deusto Business School. Sus áreas de investigación de interés principales son: el análisis de la competitividad regional y de procesos de desarrollo socio-económico, incluyendo temas relacionados con la gobernanza, redes/clústeres, políticas públicas, evaluación de políticas y la medición del progreso socioeconómico. Ha publicado más de 40 trabajos relacionados con estos temas, en numerosas revistas internacionales y libros académicos de prestigio. James ha sido invitado como ponente experto / asesor por la Comisión Europea y Banco Interamericano de Desarrollo, entre otros, y ha sido profesor en varias universidades. Asimismo ha impartido conferencias en todo el mundo, y contribuye activamente en debates mediáticos y en twitter (@jamierwilson).

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