Friday, 22 February 2013

19FEB: Regional Economic Development Essay in honor of Francois Perroux


a summary and an example from experience on:
Regional Economic Development
Essay in honor of Francois Perroux
1988

Chapter 2: The pole of development’s new place in a general theory of economic activity

The essay argues that development historically only happens through the development poles. 
Development pole can be described as a (big) firm investing into an enterprise that will create profit, physical structures, employment, transportation links etc. The pole can be fixed to region or to (existing) firms. The surrounding population can negotiate with the firm in professional, institutional or informal manners to distribute the forthcoming wealth. 
The development poles have the potential to be growth inducing. They inevitably influence the local status quo – create demand for services for new workers, offer business opportunities along new transportation links etc. The author defines a fundamental difference between growth pole and development pole. Growth means a sustained increase in e.g. GDP; development is the sum of the changes in social patterns and mentalities through which the production device is coupled with the population: Product that serves the population rather than is an ‘alien’ to it. 
I wonder if the above argued difference is indeed the major flaw of the recent ‘retrofit – robin hood’ attempts by big firms to pay back to the exploited land. For example The Business in the Community is a company, which helps big international firms do exactly that.  BITC helps companies like BP identify a need somewhere in the developing world and plans how to spend money in the region on ‘development’ which will also serve as an eco/poverty conscious marketing tool for the firm. I was aware that this ‘guilt laundering’ has flaws – it is a retrofit, it is using poverty for marketing purposes, it is perhaps a tic-box exercise, but above all it does not connect the product of the big firm with the population in the first place. 

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