Pespectives on economic localized development

Abstract

The growing mobility of production and production factors could have contributed to a polarization reversal. However, it appears that economic development is increasingly localized in economic agglomerations. Globalization is a localized phenomenon. The purpose of this article is to review three partially overlapping perspectives on local economic development. These three perspectives broadly correspond to three factors enhancing the localized nature of economic development, namely externalities, learning and governance. Externalities are well-known phenomena associated with agglomeration. New is the fact that they constitute a source of increasing returns. This new school of geographical economics will be reviewed. At the same time a new economic geography emerged on the basis of clusters and industrial districts. Externalities are extended and change form. Dynamics of local economic development can be analizes from the perspective of evolutionary economic thinking. Learning in general and collective learning in particular are central concepts, not only at the level of firms but also at the level of territorial institutions. Learning increases and renews local competencies for economic policy. The growing complexity of relations between firms and between firms and territorial agencies is an important potential source of synergy and external economies but require new forms of governance at the level of industry and territory.