Policy Induced Regional Interactions in Enhancing Global Industrial Competitiveness

This chapter discusses the role of policy induced regional interactions in promoting regional competitiveness in globalized industrial role. The chapter is based on two Swedish regional policy initiatives that are strongly influenced by a regional innovation systems approach and a Triple Helix framework. The highly interrelated concepts of Regional Innovation Systems (RIS) and Triple Helix (TH) have not only contributed with the theoretical foundation for policy to offset global pressure; they also contribute to the theoretical framework for the policy analysis in this chapter. The concept of interaction, as introduced here, may be looked upon as a general term that encompasses all those non-market relations, abstracted from orthodox economic theory but which are necessary for the understanding of the function of the economic system. It may be argued that Coase (1937) with his transaction costs identified the border between interactions in the form of a hierarchy inside the firm and the market outside it. With the exception of Marshall (1890), to which we will return to below, non-market interactions outside the firm, and/or crossing firm borders, were for a long time neglected however in economic and industrial analyses. Today, when the network economy is a widely used concept in characterizing the globalization processes of our time (cf. Castells, 1996, 2000), it should be noted that interactions in the form of industrial networks were in focus among industrial researchers in Uppsala university in Sweden already in the 1980:s. The “Uppsala School”, with its focus on actors, activities and resources, is one important pillar in the development of the family of network approaches (cf. eg. Hakansson, 1982 & 1989; Hakansson & Snehota, 1995 & Axelsson & Easton, 1992). Although with some exceptions, the Uppsala School focused on industrial networks proper; institutions were not part of the system. With the point of departure in an industrial marketing perspective the Uppsala network approach was rather broad; innovations were part of it but, with some exceptions, not in focus. The Uppsala school was far from alone in developing academic theory beyond market relations proper during the 80s and 90s, however. The variety of network approaches is great, including sociological approaches as well as geographical and economic; explicit and intentional approaches as well as externalities and cultural (for an overview cf. Coombs et al, 1996). The approaches used in this chapter are discussed in detail in section two below.