What is happening within regions and agglomerations?

The first argument in Chapter 7 was that incremental change is common in regional economies. Such change varies in degree and can be studied on several different levels within regions: at the levels of resources, uses and capabilities. Second, incremental changes often take the shape of related regional diversification. In Jane Jacobs’ words, new work develops from parent work in regions because of learning processes and what the old work “suggests” (Jacobs 1969). This is also one of the main reasons why so much regional development is path dependent. The regional resource repertoire and the specificity of regional resources condition the direction in which new work develops.

Resource building, diversification (i.e. the expansion of regional capabilities) and change are strong processes in the capitalist economy. Nevertheless, they seem to work in very different ways in different places, and regional economies look very different to one another. A key reason for this is that the regional resources themselves that are built, used and curated across time are very different from place to place. For example, informal institutions, such as the entrepreneurial spirit or cooperative norms, differ across different regions. This affects how and where resources can be combined into bundles and achieve capacities.

However, in order to understand why economic change looks so different in different regions, we need to explore another important geographical aspect that so far has been untouched. In this chapter, we investigate what happens in agglomerations, and how this effects how regional economic change happens. Later, the issue of what goes on between agglomerations, and how that affects regional change, is explored.

The main issue that we explore in this chapter is why regional change is essentially regional in nature. Certainly, regions have different resource repertoires, and some regional resources are not portable whereas others are, but is that all that differentiates regions that build resources and diversify more productively from those that do not? In this chapter, we explore ideas about what agglomerations of economic activities do to economic change and learn what research has to teach us in this regard.