SERIE RESEARCH MEMORANDA Moving Frontiers: A Local-Global Perspective

The paper addresses the position of peripheral areas fì-om both a local and a global perspective. It is argued that the drive towards a network economy ofien global in nature has far reaching implications for the economie and geographical profile of border regions. The paper starts off fi-om a theoretical perspective and shows that modem network theory in combination with transaction tost theory may offer a meaningfùl operational analytical fmmework for understanding the changing positions of regions in our world. A major question is then whether the new spatial dynamics will lead to convergente or divergente patterns among regions. A critical overview of convergente theories against the background of globalisation phenomena is then given. It is argued that there is a tendency towards club convergente. The consequences for regio& development policy are next spelt out. There is no uniform policy panacea; policy strategies have to be fine-tuned and tailor-made, and should address the specific needs and opportunities of regions. Finally, the position of border regions is revisited. It is argued that accessibility polities aiming to alleviate the negative consequences of peripheral location deserve priority, provided the region has suflïcient economie self-reliance to cape with competition f?om outside. 1 . Trends Towards a Network Economy Traditionally, border areas are regarded as low opporhmity regions. The geographical isolation of such areas causes a low competitiveness profile as a result of reiatively high transportation costs and low economies of scale and density. In many countries, border areas are regarded as economie problem regions which are often supported by policy stimuli (e.g., inf?astructure subsidies). A significant part of the structural funds of the EU is based on this background view. Recently however, also many studies have been published which demonstrate the growth potential of border areas. Through their geographic position border areas may act as strategie contact and communication regions between different economies which are interlinked by means of cross-border trade and transport flows. There are several examples which show the validity of this argument, e.g. new emerging cities near the US-Mexican border, cities like Aosta and Bellinzona near the Swiss-Italian border etc. (see e.g. Ratti and Reichman 1993). In this context, the notion of an ‘active contact space’ has been introduced. Apart tiom connectivity reasons, there are also other strategie elements which may offer border areas a competitive advantage. Especially in case of infant industries, emerging new firms may need a protective and hence less accessible environment to develop a market niche. Examples are the Swatch industry in the Swiss Jura or Lego in Billund (Denmark). It seems thus plausible that peripherahty may also offer a temporary protective shell for specifïc branches of the industry. In recent years we are witnessing drastic changes in the industrial composition and mechanisms of our world. Cities, regions and nations world-wide exhibit complex and turbulent movements induced by indigenous growth and spatial connectivity. In the past decades, structural change and differential (fast and slow) dynamics have become a dominant feature of economies at all levels, where stability is substituted for transformation. After the era of the Industrial Revolution in the second part of the last century which was marked by new ways of organising production and transport on the basis of new technological innovations favouring large-scale production, we observe in the second part of this century a new phase in the history of our developed world, viz. a Network Revolution marked by interconnected modes of production and transport on the basis of radical restructuring of logistic, tiormational and communicative processes favouring neo-Fordist types of production including the emergence of component industries (see Lagendijk 1993). The changes we are observing nowadays have several important dimensions, each relating to and interacting with a number of others. Spatially, we see new trends reshaping the location of goods handling activities (and also the location of information-handling activities) between and within regions and nations, where interconnected nodes play a strategie role. Sectorally, the Network Revolution incorporates both the growth of tertiary activities, and the changing relationship and blurring differentiation between manufacturing and service industries. And finally, fiom an organizational perspective, new developments reflect important changes in the nature and forms of the relationship between enterprises, and the ownership and control of these enterprises, a phenomenon supported by competition and deregulation. The recent revival of Schumpeterian views on current spatial economie restructuring phenomena has increasingly induced scientific interest in innovation and economie transfoxmation (Giersch 1984). Both the behavioural stimuli and the selection environment for the creation and adoption of technological and organizational change in fìrms have become a