the urban turn: cities, talent and knowledge in denmark

8/13/2019 The urban turn: cities, talent and knowledge in Denmark

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Tu

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Hgni Kals Hansen

Lars Winther

Urban

T

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Aarhus University Press

Cities, talent and knowledge in Denmark


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The Urban Turn


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The Urban TurnCities, talent and knowledgein Denmark

Aarhus University Press |a

Hgni Kals Hansenand Lars Winther


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The Urban Turn

the authors and Aarhus University PressCover by Camilla Jrgensen, TrefoldEbook production: Narayana Press

ISBN 978 87 7124 0 89 6

Aarhus University PressAarhus

Langelandsgade 177DK 8200 Aarhus N

Copenhagen

Tuborgvej 164

DK 2400 Copenhagen NVwww.unipress.dk

Published with the financial support of the COWI Foundation andthe Centre for Strategic Urban Research financed by Realdania

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Contents

Acknowledgement

. Introduction to the Urban Turn

. City Regions, Talent and the Knowledge Economy:Framework for Analysis

. The Rise of City Regions in Denmark

. Urban and Regional Distribution of Talent: LocationDynamics and the Spatial Division of Talent in Denmark

. The Outer City: Urban Economic Geographies in theMaking

. Location Dynamics and Imaginary Spaces of Location

Epilogue: Geography, the Urban and Economic Growth

References

Index


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Acknowledgement

This book is based on a series of papers that have appeared in scientific

journals. We wish to express our appreciation to the publishers whohave granted us permission to use the material. The papers in ques-tion are: Hansen, H.K. and Winther, L. (), The Spatial Divisionof Talent in City Regions: Location Dynamics of Business services in

Copenhagen, Tijdschrift voor Economische en Sociale Geografie, :-; Hansen, H.K. and Winther, L. (), The Spaces of Urban

Economic Geographies: Industrial Transformation in the Outer Cityof Copenhagen, Danish Journal of Geography, (): -; Win-ther, L. (), Location dynamics of business services in the urbanlandscape of Copenhagen: Imaginary spaces of location, BELGEO,(): -; and Winther, L. and Hansen, H.K. (), The eco-nomic geographies of the outer city industrial dynamics and imagi-nary spaces of location in Copenhagen, European Planning Studies,(): -. The book has been published with generous financial support from

the COWI Foundation and the Centre for Strategic Urban Researchfinanced by Realdania.


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. Introduction to the Urban Turn

This book is about the urban turn. The urban turn is about the growth

and resurgence of large cities and city regions in the past decades. The

urban turn emphasises the importance of cities and city regions as the

key places that generate economic growth in modern capitalism. Theresurgence of large cities happened concurrently with the rise of the

knowledge economy, together with the increased use of talent that hasbecome a key resource in the economy. Talent, e.g. the ability of people,

or groups of people, to produce, use and distribute knowledge thushelping to solve problems and generate new ideas is an essential re-source exactly because the rise of the knowledge economy was a major

response to stronger global competition. Globalisation processes have

transformed the economies in Denmark and in Europe through, forinstance, increased price competition from the low-wage countries, the

expansion of new markets and a stronger competition among globaland local firms. As a result, many firms in Europe have had increasedfocus on innovation, i.e. new products and production processes, toremain competitive. New knowledge is fundamental to innovation, and

thus the rise of the knowledge economy as an economy that is basedon the production, distribution and use of know-how, has become amajor important constituent in the modern European economy. It has

become visible in many places in the economic landscape particularlyin the large urban regions that generally offer a greater degree of ac-cessibility to qualified labour, and to diverse labour markets, as well


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as proximity to knowledge institutions, markets and global linkages.Although this is evident for high-tech industries and advanced business

services, it produces an uneven economic geography of talent and eco-

nomic growth and changes the conditions for local economic growth.

Hence, the book is an introduction to and analysis of the location,distribution and dynamics of economic activity, uneven geography and

the local economic development processes. A key element of such ananalysis is that knowledge and knowledge production have becomeimportant themes for understanding urban and regional development;

not least in an analysis of the locations that underpin the production,distribution and use of knowledge. Talents are people who work

in creative occupations and thereby are innovative in their everydaywork. The creative class, which Florida () labels this group ofpeople, is characterised by being paid for their brain skills rather

than their physical skills. This particular group of people therefore

has been allocated a new position in the workforce in comparison

to the situation earlier in a traditionally capitalist production. Today,with the growing importance of knowledge in capitalist production,a crucial part of the knowledge embedded in the means of production

is embedded in the employees themselves, and thus the power rela-tion between employers and employees has changed dramatically. The

employers today are more vulnerable to loosing key and core skilledemployees and are thus more dependent on drawing new knowledgeinto the firm by way of attracting talents. According to present theories within the field of urban and regional

studies, firms that compete on knowledge and innovation have better

opportunities to optimise qualifications and human resources in larger

city regions because the supply of competences in these places is much

greater and varied. Thus cities, especially large cities, have gained an in-

creasingly central position when discussing the appropriate conditions

for regional economic growth and development. Geography does mat-

ter, and cities and city regions have once again turned out to be the vital

places of innovation and creativity, making them important strongholds

in the national and global economy. This is an important prerequisite

to understand the processes of competitiveness and knowledge produc-tion in firms and industries and to understand how locationsunderpin

the economic spaces which increase their competitiveness.


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The analysis of urban economic dynamics in this book takes its

point of departure in two basic ways of theorising and explaining

the urban and regional economic growth. Both frameworks build onagglomeration economies, and thereby argue that the co-location of

economic actors and the concentration of economic activity have apositive influence on the economic performance of firms and indus-tries, and hence on urban and regional growth. The first framework,localisation economies, concerns local factors that are external

to firms but internal to an industry within a geographical region

(Feldman, , p.). Localisation economies can be understood as

dense input-output relations, a skilled labour pool and organisational

and knowledge spillovers that are external to a firm but internal tofirms within an industry in a geographical bounded area. Localisationeconomies relate to firms within closely related industries and the basic

argument is that co-location in the knowledge economy can help tospread new knowledge on the one hand and provide a large pool ofhighly qualified labour on the other. The second framework, urbani-sation economies, can be seen as scale effects associated with citysize or density. (Feldman, , p.). Urbanisation economies shall

be understood as effects that are external to industries but internalto a bounded urbanised area. Urbanisation economies are related toall firms in all industries, and the basic argument is that density anddiversity can help reduce search costs, on the one hand, and exposefirms to unexpected events that can bring along new knowledge, andhence innovations, on the other hand. An important conclusion is

that urban size, diversity and density matters to realise urbanisationeconomies. Further, changing economic and industrial structures, shifting modes

of production and organisation caused by fluctuating demands andtechnological breakthroughs have induced different moderations of

localisation economies and urbanisation economies in an attempt toexplain the dominating economic dynamics of a particular place at aspecific time. Time and place are parameters that constitute the fieldof economic geography and urban and regional growth (Storper and

Scott, ). Essential for the understanding of urban and regionaldevelopment is that the urban and regional systems drive the economic

development in different directions; the importance of a particular city


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changes over time and the geographical context matters but differsamong cities and regions. The theoretical focus in urban and regionalstudies in the s and early s was on localisation economiesand highly specialised local growth especially directed against theoris-

ing the emergence of industrial districts in the s and s andflexible specialisation as a new mode of growth (Brusco, ; Priorand Sable, ). The economic growth in many European countrieswas found outside the large city-regions in former rural and peripheral

regions based on specialised local production systems (Asheim, ;Markusen, ). In the late s and s, the theoretical focus changed and was

directed towards urbanisation economies and the growth of largecity-regions as they once again began a period of marked growth

(Scott, ; Hansen and Winther, ). In the s and s

many large city-regions in Europe were in crisis, experiencing job lossand deindustrialisation especially in the inner cities (Scott, ). The

resurgence of the large city regions was based on the rise of a varietyof industries mainly within the service and knowledge economy, partly

initiated through a general organisational disintegration of non-core

activities leading to a growing independent field of service activitiesformerly taking place inside the organisations and hence a revitalisa-tion of many inner cities in Europe and North America. This set ofprocesses led to an increasing regional division of labour reinforcinginter-urban and urban-peripheral competition, creating even more

distinct differences between spaces of production and consumption.Consequently, the s and s witnessed an increasing competi-tion between places for investment, firm location and, recently, alsolabour and especially talents. The book takes its departure from this perspective, e.g. viewing thecity as a crucial entity for understanding the economic dynamics ofmodern capitalism. However, the book is also sceptical towards thesenew theories as they often reduce cities and city regions to spaceless,one-dimensional cauldrons of creativity and innovation evident from

Jacobs () to Florida (). In the following chapters we analyse

the relation between geography and growth in Denmark to providethe readers with a better understanding of the conditions for regionaldevelopment. We do this by analysing and discussing different aspects


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of the city, looking at the geography of knowledge economy repre-sented by firms, employment and talent. Cities and regions expanding into the surrounding areas and cre-ating large city regions characterised by new urban forms, shifts in

location patterns, changing divisions of labour and transformation ofindustrial structures have produced new economic geographies andnew urban structures. The economic geographies of the new urbanforms produce many different challenges to our analysis of the urbanlandscape, including social and political aspects. We focus entirely

on the economic geographies and practices in the urban landscape.The main concern is how the new urban forms as such challenge our

theories and methods. Understanding what produces the changes in the economic geogra-phy of city regions requires a relational approach to urban economicgeography. The various urban forms are not autonomous, independ-ent, urban economic forms. Rather, they are relational spaces that

transcend borders and urban hierarchies. Industrial dynamics and thelocation of firms cannot only be understood from a location in thelocal urban hierarchy or the size of its local hinterland, as suggested in

the standard models of economic geography, which draw heavily onthe orthodox research tradition in economic geography. This tradition

is highly influenced by Christallers central place theory and Webersmodel of location and their later different theoretical developments,which, of course, are also evident in regional science and the quan-titative revolution in geography (Hoover, ; Lsch, ; Isard,; ; Chorley and Haggett, ; Harvey, ). Although

the position has been heavily criticised in economic geography sincethe s see, for instance, Massey () over Barnes () tothe current relational turn in economic geography (Boggs and Rantisi,

; Bathelt and Glckler, ), the understanding of the outer city

or suburban areas as subordinate to a city centre is still strong in theliterature: the central city is the epic centre of the service and knowl-edge economy in the global city-regions. City regions are, as statedabove, sometimes reduced to spaceless caldrons of innovation and

creativity. The problem with this conceptualisation of metropolitanregions is that this alone cannot explain the economic processes oftransformation in the regions (Jonas and Ward, ).


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Founded on the observed structure and dynamics of the outer cityand suburban areas of Copenhagen, we argue that the multifacetedeconomic geographies of the city regions call for alternative ways ofthinking about urban economic geographies. The main question to

be answered is: what are the underlying processes and structures thatproduce the new economic geographies of the new urban forms? Wesuggest in the book that the analysis of the economic geographies ofcity regions should take an epistemological leap away from thinkingof the various urban forms industrial and economic development asonly a result of a specific position in an urban landscape, where theouter city and suburban areas are subordinate to the central city and

their economic functions are a result of the size of the hinterland:to think of the city region and its various urban forms as relationalplaces, where different relational spaces of the firms and industries for instance, the firms knowledge spaces, customer spaces, or labourspaces connect and produce specific spatialities of urban economicgeographies. Another important epistemological leap is from understanding the

specific urban forms as independent, territorial units within a hierarchy

and as autonomous entities with a hinterland; in other words, to under-stand them as borderless, relational places. These relational places are

produced in a changing functional and spatial division of labour with

new specialisation patterns arising as a result of the interdependence

with other urban forms and the processes of path-dependency and lock-

ins. This draws partly on the relational position in economic geography

(Amin, ; ), Amin and Thrifts () and Amin and Cohendet

(). In this context, location is understood as situated distanciated

networks. Amin and Cohendets () discussions of the production

of knowledge in firms illustrate the relational position. They focus on

the firm as the locus of knowledge production rather than the region.

By doing so, they see different factors underpinning the knowledge pro-

ducing processes. They do not exclude geography (the local or regional)

as an important factor for the shaping of firm networks, but the space

that the firms operate in cannot be reduced to a matter of geographical

scale (regional or local). The firms network consists of the firms rela-tions and hence, analytical focus should be on the space that is defined

by the firm relations: the spatial extension of the relations.


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On the other hand, we need to understand how places/locations

underpin the firms networks and relational spaces. A regionalist ac-count can contribute to an understanding of the production of firmnetworks and their spatiality. The regionalist position attributes geo-

graphical proximity a vital role in the production of knowledge, andhence, for urban and regional competitiveness and growth. At present,

researchers like Asheim (, ), Morgan (), Storper (),

Cooke and Morgan (), Maskell and Malmberg () and Gertler

() are drawing the main conclusions of the position, theorised,for instance, in the conceptualisation of learning regions to under-stand the path-dependency of regional change from an evolutionary

perspective (Essletzbichler and Winther, ; Boschma and Frenken,). Common to the contributions is the fact that the geographyof culture, institutions, norms and values are decisive for trust amongeconomic actors (people and firms). The region is conceptualised as aspace in which the institutional framework of learning processes andknowledge production is produced and reproduced. Consequently, the new dynamics in the urban economy call for ananalytical framework that emphasises the importance of social rela-

tions and how these relations interact in space. The analysis has totake into account that local, regional and national institutions play acrucial role in the contents and evolution of specific linkages in net-works. Therefore, the dichotomy between for instance the city centreand suburbs, or the urban fringe and the hinterland, should be replaced

by an analytical conceptualisation that opens for new understandingsof economic dynamics by detecting and analysing linkages within

firms networks. This will contribute to a better understanding of theknowledge creation and competitiveness of firms and how they canbe underpinned within various urban forms. Figure . summarises the main focuses and relationships of thisbook. We examine urban and regional growth with the city region

as the geographical entity in the cross field between localisation andurbanisation economies. We stress the importance of the rise of theservice and knowledge economy for the resurgence of city regions

and the urban turn and especially how talent is related to urban andregional growth in the last decades. We do that using different per-spectives. Chapter sets out the theoretical frame and describes the


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main relationships of Figure .. Therefore the chapter gives a morethorough introduction to the theoretical contributions to the debateson the urban turn in economic geography and urban and regional

studies. The chapter serves as a theoretical framework explaining

the localisation of economic activity within which the forthcoming

chapters shall be read and understood. It presents and outlines the

key concepts that are essential for our argumentation throughout theremaining chapters. Thus, we explain the importance of knowledge in

contemporary capitalism and how it is related to location and citiesand regional growth. We especially focus on localisation and urbani-sation economies as two important sets of mechanisms and processes

changing modern economic geography. Creativity and talent is criticalfor knowledge and knowledge production, and we emphasis the roleof talent in understanding regional growth and the uneven geography.

Figure . Key relationships and theoretical conceptions in urban and regionaldevelopment

Locationof Industries

Locationof Firms

Inter andintra regionalunevenness

Expansion ofthe outer City

Spatial distribution

Space and place


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Chapter presents the main characteristics of the urban turn in Den-mark with a focus on the economic geographies of two dominant

city regions. The chapter supplies an introduction to the economic

geography of Denmark in a historical perspective. It describes the

geographical outcome of the recent decades of development, stress-ing the patterns of the uneven geographies in the making and divi-sion of labour, division of production etc. The rise of the knowledgeand service economy has a strong influence on the success of the cityregions, and talent is one of the strong explanatory factors of the

new economic geography with strong city regions. This leads on toChapter which focuses on the regional and urban division of talent

in Denmark. This section discusses the geography of talent in Denmarkand how this geography is becoming increasingly imbalanced with the

present economic dynamics. The chapter goes even a step deeper anddiscusses the division of talent, not only between regions, but also

within regions, stressing the heterogeneity of cities on the one side,and talents on the other. The heterogeneity of city regions that is already touched upon inChapter is taken further in Chapter . This chapter looks into what

we coin the outer city. A strong effect of the urban turn and re-surgence of cities is that they expanded into their surroundings andinclude small and medium sized cities and open land in the urban

region. Thus, we argue in Chapter that the transition zone betweenthe urban and the rural represents a new economic geography in themaking. The outer city still provides shelter for more traditional types

of production and represents location dynamics that are different from

what we see elsewhere in the city, and this is the point of departurein Chapter . Here we change perspective and introduce the conceptof imaginary spaces to challenge the traditional understanding of thelocation preferences of firms. Thus, in Chapter the firm and firm

location becomes the perspective from which we examine the location

of economic activity in city regions. Lastly, the book concludes with an epilogue and puts the findingsinto perspective in regard to how we want to approach regional de-

velopment in Denmark.


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. City Regions, Talent and the KnowledgeEconomy: Framework for Analysis

This chapter outlines the conceptual framework within which we canunderstand the dynamics that shape the current economic geographyof Denmark. We introduce contemporary theory within the field ofurban and regional studies, focusing on the nexus between knowledge

production, urban spaces and regional development to coin the maindrivers of modern capitalism. The aim of the chapter is to provide asolid conceptual frame for understanding the following chapters andto introduce the geographical units of analysis that are used through-out the book and the data that are used for analysing the dynamicsof the units. Competitiveness between city regions has gained a more and morecentral position in regional development and regional planning within

the last decades (Amin and Thrift, ; Florida, ; Glaeser, ).

A reason for this is that globalisation has caused pressure on industrial

structures, forcing firms to increase their competitiveness by more

actively promoting innovation and knowledge creation. Access to

knowledge has therefore become vital for most types of productionin Western economies. Based on growing interest in knowledge creation and knowledge

exploitation, a bulk of literature has emerged within the field of eco-nomic geography and neighbouring disciplines that study the relationbetween geography and knowledge creation. Lundvall () points to


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the importance of establishing and underpinning systems of knowledge

creation to facilitate innovation in what he calls the learning economy.

These systems of innovation, he argues, depend on national institutions

and are embedded in a national economic structure. This argument is

taken further by Cooke (), Cooke, Uranga and Extebarria ()

and Asheim and Isaksen () who argue that not only national butmore importantly also regional institutions and institutional set-upsunderpin innovation. Therefore, a regional innovation system basedon institutions embedded in a local and regional socio-economic con-text should rather be the perspective for understanding processes ofknowledge creation and innovation. Further, within industrial geog-

raphy, the regions are stressed as the key to understanding industrialdevelopment. Storper () and Storper and Walker () claimthat labour is produced and reproduced within the institutional set-up

of regions which is strengthened by regional industrial and economicstructures. Hence, labour skills, competences and capabilities becomedeeply rooted in the geographical settings of cities and regions, andthus production of goods and services and reproduction of labour

have a path-dependent character.

As argued in Winther (), regions, like firms and industries, canbe considered to follow distinct paths of technological change and

innovation. Regions may be characterised by their variety in terms oftechnology, organisational and informational characteristics (Rigby

and Essletzbichler, ). Geographical and industrial inertia and dif-

ferences through investment in capital stock, knowledge productionand learning, business culture, regional institutional set-ups includingpublic and private organisational structures and traded and non-traded

interdependencies between firms and other regional organisations and

institutions result in a diversity of regional production and innovation

systems (Clarke and Wrigley, ; Storper, ; Saxenian, ;

Braczyk et al., ), a diversity that is emphasised on firms and in-dustries use of various knowledge bases (Asheim and Gertler, ;Asheim et al., ).The regional diversity is carried through ties

between local firms and institutions, the accumulation of capital and

knowledge, and the knowledge embodied in labour and organisationalroutines. Bounded rationality and interaction between institutions

and organisations have strong enabling as well as constraining effects


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on the pace and direction of economic growth and performance ina region. Firms are a part of the regional environment of social rela-tions and institutions which set regions on a successful or fruitless

development path. Economic crisis in regional systems are a part of

the dynamics of capitalism through innovation and restructuring. Viewing institutions as reinforcing regional success, or the lack of it,

is based on a systemic line of thinking. The understanding of produc-tion and innovation can, however, also be viewed in a more individual

perspective. Individuals are carriers of the knowledge that is createdand used in production of goods and services. Consequently, individual

people are the nexus for firms to access information and knowledge.

In the literature, people in possession of valuable knowledge are oftenreferred to as talents(e.g. Florida, ). Therefore, the geographyof knowledge is also the geography of talents. The geography of talents deals with the location of labour, whichpossesses valuable knowledge and which is capable of absorbing andapplying knowledge and information. The understanding of locationof talents cannot, however, be detached from the analysis of institu-tions (understood as the rule of the game, norms and values), private

and public organisations and economic structures including regionallabour markets, that will have influence on the location of talent andthe efficiency to generate and use knowledge. As the creation of and access to knowledge have become increasingly

important to remain competitive, a growing focus has been placed onhow, who and where knowledge is produced, used and diffused thisis the key to understanding the geography of the knowledge economy.

The interest in the relation between knowledge and regional competi-

tiveness, and in how knowledge creation is underpinned, has been

addressed within study areas of innovation systems (e.g. Lundvall,

1 In the literature, talent is only one of several concepts covering the same areaof interest people who become assets in the knowledge intensive productiondue to skilled or special competences, high educational level, or their creativemindset, which makes them valuable for solving problems, generating new

ideas etc. Concepts used to cover the same group of people are e.g. humancapital and creative capital. Hereafter, the term talent will be used as a com-mon denominator for this group of people, though the difference between theconcepts will be touched upon later in this chapter.


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; Edquist, ; Braczyk, Cooke and Heidenreich, ; Asheim

and Isaksen, ), learning regions (e.g. Florida, ; Asheim, ,

; Morgan, ; Archibugi and Lundvall, ), industrial dis-tricts (e.g. Brusco, , ; Beccatini, ; Asheim, , ;

Markusen, ), regional clusters (e.g. Malmberg et al., ; Porter,

) and urban dynamics (Jacobs, ; Florida, ; a). The

latter is often referred to as an urban turn in economic geography, areference to the emergence of urban landscapes as the (global) hotspots

for economic growth in modern capitalism. Briefly, the urban turn isthe focus on the diversity that cities offer and how they provide anexcellent arena for accessing new knowledge, defined as the ability to

materialise information into productive ideas and later innovation.Therefore, the city becomes central to understanding the location

dynamics of economic activities in a knowledge economy defined asthe use of knowledge to produce economic profit.

Location, cities and regional growth

We identify two main research paradigms that have had significant

influence on research of the economic geography in Denmark: the or-thodox and the heterodox research paradigm. The orthodox paradigm

has its roots in the quantitative revolution of the s and sand positivism and in the tradition of empiricism and more descriptive

economic geography (idiographic approach). The heterodox paradigm

is very heterogeneous and has its theoretical advances within the stud-

ies of the economic geography of production and urban and regionaldevelopment in the s and s. The paradigm is divided intotwo main strands. The first strand is rooted in the early critique of the

quantitative revolution and the development of Marxist approachesto industrial geography, often building on critical realism. The secondstrand is based on the institutional and relational turn that emergedin economic geography in the s with traces of the cultural turn.This marks the backbone of the current debates in urban and regional

studies.

We do not provide a full fledged review of all the theories andmodels that have seen the light of day in economic and industrial

geography in the last fifty years. Neither is this an attempt to write


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the history of economic and industrial geography. It is, however, anattempt to point to the central theoretical frameworks in industrialand economic geography that have stimulated, influenced and beenthe explanatory base for research of the space economy in Denmark.

The two paradigms have been central in the development of westernhuman geography (Cloke et al., ; Peet, ) and in economicgeography (Walker, ; Barnes, ; Scott, ), although the

strength, influence, importance and perseverance of the paradigms

vary tremendously between countries (Bathelt and Glckler, ;

Barnes, ; b; Scott, ). The classification does not pro-vide any review of the behavioural and humanistic traditions as they

have not been dominant in studies of urban and regional growth anduneven economic geography. Further, the classification does not takeinto account feminist economic geography and the emergence of a

post-structural paradigm (Oberhauser, ; Gibson-Graham, ).

Perspectives from these paradigms have had an important influenceon recent development within the heterodox tradition, including ac-tor network theory (Amin, ; Barnes, b; Murdoch, ;

Dicken et al., ). The different post-structural perspectives, in-

cluding discourse analysis, have not yet been significantly applied toeconomic geography in Denmark although recently Stber ()and Ek () have analysed the discourses involved in creating aneconomic cross-border region between Denmark and Sweden: the

resund region. Further, the cultural turn in economic geography

(Lee and Wills, ) has pointed to the social and cultural embed-dedness of economic geography (Gertler, ; ) and hence theunderstanding of multiple rationalities (Ettlinger, ) and the factthat economic spaces are always imbued with a variety of mean-ings beyond those of economic rationality. (Hudson, , p. ). Theideas of social and cultural embeddedness of economic action havehad a more important role in recent years. The emergence of new fields of research such as the urban turn isoften a result of historical contingency (Scott, ; ). It is re-lated to the real world changes but is also a result of institutionalised

research traditions. First of all, we identify a group of orthodox per-spectives. This group of perspectives has its roots in the quantitativerevolution of the s and s and in the tradition of empiricism


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and more descriptive economic geography. Secondly, a group of het-erodox perspectives is identified. It is a heterogeneous group that hasits theoretical advances within the studies of the economic geographyof production and urban and regional development in the s and

s. This group is divided into two main sub-groups of perspectives.

The first sub-group is rooted in the early critique of the quantitativerevolution and the development of Marxist approaches to industrialgeography. The second heterodox sub-group is based on the institu-tional and relational turn that emerged in the s. We emphasis the

latter in the following. This division into two main groups of perspectives is of course a

rough simplification of the real research done, and of the history ofeconomic and industrial geography. It does not do justice to the stud-ies that have crossed the borders between the two but it does, on theother hand, pinpoint crucial ontological, epistemological, theoreticaland methodological differences between the different research tradi-tions.

The orthodox tradition

The orthodox research tradition in geography and urban and regional

studies is constituted by several strands of research that are groundedin at least two different scientific paradigms, both of which have beenvery visible in the history of economic geography and immensely in-fluential on the early research of economic geography in Scandinavia,mainly in the s and s. One string of explanations is basedon the theories that were read into (economic) geography during thequantitative revolution in the s. Therefore, this string of research

bears significant marks of the deductive nomothetic science and (logi-cal) positivism, and thus the marks of a search for universal laws andregularities among atomistic observable objects. This is evident in theholy trinity of the quantitative revolution in economic geography:Christallers central place theory, Webers model of location (see below)

and von Thnens land-use model, and of course also evident in the

neoclassical paradigm in regional science (Isard, ), and geographyin general (Chorley and Haggett, ; Harvey, ). Another important theoretical development that influenced the


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research was Perreuxs ideas of ple de croissance, its translation

into spatial terms by Boudeville and especially the theories of spatial

economic polarisation provided by Myrdal () and Hirschman

(). These theories provided alternatives to neoclassical explana-

tions but they share the ontological and epistemological inheritance;

thus, for instance, homo economicus with the above-mentioned

theories. In contrast to the neoclassic model of regional equilibrium

(Armstrong and Taylor, ), theories of polarisation claim that

the market and the market mechanisms do not produce equilibrium

and regional equalisation through the price mechanism and factor

mobility, but are precisely the reason for regional economic differ-

ences because of the regional economys cumulative characteristic(Myrdal, ; Hirschman, , Kaldor, ). The basic argument

is that changes in the regional economy lead to further changes due to

multiplier effects. The market and the markets mechanism are, due to

internal and external economies of scale, the cause of uneven regional

growth. Central to the arguments is Verdoorns law (Verdoorn, ),

which states that increases in labour productivity is a function of the

growth in output, due to economies of scale, that is seen as vital to the

growth of regions. Further, agglomeration economies (urbanisationand localisation economies) are more effective than investment in low

wage labour. Labour migrates to growth regions due to high wage

levels, and the result is that peripheral regions lose labour, causing a

slowdown in economic growth. Capital is not immobile, but is mov-

ing from peripheral regions with few options for investment towards

the growth regions with higher profit and less market risks. Myrdal

() defines these effects as backwash effects, while Hirschman

denotes them as polarisation effects. A growth region can have posi-

tive effects on other peripheral regions. These effects are defined as

spread effects (Myrdal) or trickle down effects (Hirschman). The

growth of a centre region increases demand for goods and services in

peripheral regions and creates growth through multiplier effects and

diffusion of technological changes. These models of centre-periphery

have been criticised empirically and theoretically (Farro and Jensen-

Butler, ) and share their static understanding of regional systemsand geographies with several neo-Marxist models of centre-periphery

(Frank, ; Amin, ).


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A third string of research within the orthodox tradition is more

related to the long tradition of empiricism in (economic) geography.This string of research often provides solid descriptive studies com-bined with more inductive explanations, and often the studies have

some of the contours of earlier ideographic studies. This Janus-facedresearch divided between the universal and nomothetic science on theone hand, and the more ideographic and descriptive science on theother, is one of the characteristics of the translation of the quantitative

revolution into economic and industrial geography (see Barnes, )

and evident in the early Scandinavian economic geography research.

The heterodox tradition

The heterodox tradition in economic geography and urban and re-

gional studies is very heterogeneous and consists of many different

contributions in the aftermath of the economic crisis of the s,

but especially two large bulks of theories can be detected in the

Scandinavian tradition (Winther, ). First, a group of heterodox

perspectives that arose from the justified critique of the quantita-

tive revolution and its models building on the fundament of logicalpositivism or the static centre-periphery structure of the growth pole

theories. The early critique pointed to the idealised conception of

geographical space in the traditional Weberian location models (Mas-

sey, ) and the whole scientific paradigm behind the quantitative

revolution (Sayer, ). The industrial decline of the North England

regions encouraged new research on urban and regional development

within a new explanatory framework. This research resulted in the

seminal restructuring approach (Massey and Meegan, ; Massey,

) and the rise of critical realism as an alternative philosophy

of science in human and economic geography (Sayer, ; ).

Further, the rise of new industrial spaces in Europe and USA put the

region as a specific place back on the research and policy agenda and

spurred a diverse literature on industrial districts in Europe (Piore and

Sabel, ; Pyke, ; ) and other forms of new economic

spaces in the US, such as Orange county and Silicon Valley (Scott,b). A significant contribution came from the Californian School

(Scott, a; Scott and Storper, ; Storper and Christopherson,


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) that emerged during the s that provided an explanation

building on institutional economics and the work of Williamson

(; ) on transaction cost theory, the macro economic frame-

work of the Regulationist School (Lipietz, ; Boyer, ; Jessop,

) and the ideas of flexible specialisation (Piore and Sabel, ).Although they were accused of eclecticism (Amin and Robins, ),

the research of the Californian School has been the groundwork for

Storpers () and Storper and Salais () work on regional

worlds of production that involved a transition towards an evolution-

ary explanation of industrial and territorial development.

From the intense discussions on industrial decline, restructuring, trans-formation of capitalism and the rise of new industrial spaces in the

s, the early s witnessed the emergence of another very im-

portant string of research within the heterodox tradition. The appear-

ance of the new string was based on a renewed interest in local and re-

gional competitiveness and economic growth driven by technological

change, innovation and knowledge. The new string was drawing on the

insights from transaction cost theory (Coase, ; Williamson, ;

; see also North, ), evolutionary economics (Nelson and Win-ter, ) and old institutional economics (Veblen, ) and the rich

and diverse literature on innovation, path-dependency and historical

lock-in. In this literature, regions have, for instance, been conceived as

learning environments that have strong knowledge spill-over effects

involving firm networks, the local labour market and the local institu-

tional set-up (Camagni, ; Braczyck et al., ). Innovation is in

this setting understood as an evolutionary and path-dependent process

favoured by geographical and socio-cultural proximity (Maskell and

Malmberg, ; Storper, ), for instance combined in the idea of

learning regions (Asheim, ; Morgan, ). Theoretically, these

directions in economic and industrial geography use the ideas coming

from a broad range of social sciences, e.g. organisation theory including

the resource-based view of the firm (Penrose, ; Maskell and Malm-

berg, ), network theory drawing on economic sociology (Gran-

ovetter, ) and the socio-economic networks (Hkansson, ),social capital (especially Putnam, ; ; but also Coleman, ,

and even Bourdieu, ), and untraded interdependencies formed by


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conventions, norms and rules (Storper, ). This theoretical develop-

ment in industrial and economic geography whirled up a renewed the-

oretical and empirical interest in agglomeration economies and clus-

ters within economic geography and regional policy (Malmberg, ;

Maskell and Malmberg, ; Martin and Sunley, ; Essletzbichlerand Rigby, ). These new perspectives within the heterodox perspec-

tives are far from uniform. They provide many different explanations

of the industrial and economic geography. These different directions

manifest, however, the beginning of recent institutional and relational

turns in economic and industrial geography (Martin, ; Boggs and

Rantisi, ), that is the increased focus on the social relations of the

economic and industrial geography and an understanding of a dynamicand open-ended evolutionary economic system (Bathelt and Glckler,

). Things can go many different ways (Sayer, ).

Location

Central to understanding the location of economic activity is Weberslocation theory. To Weber location is an outcome of two variables;

distances to material used in production and distance to market. Con-sequently, transport costs have played a major role in analyses of loca-

tion of economic activities. Weber launched the minimum transportcost model in (Weber, ). Down to basics, the model arguesthat the location of firms is an outcome of distance to materials andmarket. According to Weber, materials can be categorised into two

groups; ubiquitous and localised.Based on the two categories of

material, Weber constructs the ton-mile to decide the most adequatelocation of economic activity. The ton-mile represents the relationship

between the distance, amount and category of the material that has to

be transported to the production site and the weight of the product

2 Ubiquitous materials are materials that can be found in most places wateris a typical ubiquitous. Localised material is the second type of material andcan be divided into two groups. Pure material is material like yarn for manu-

facturing of cloth. Gross material is material that loses weight in production.An often used example of a gross material is production of sugar from sugarbeets, where the dry sugar represents a considerably lower weight than thecrude beet.


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that has to be transported to the market. The relationship between the

weight of the localised material used in production and the weight ofthe end product gives a mass index indicating which is most favour-able: location close to market or location closer to resources used in

production. A classic example of Webers logic is what determines

location of breweries. Beverages hold more water than sugar, hop etc.Consequently water will be crucial for location. As water is a ubiq-uitous material, the brewery will tend to locate close to the marketwhere the beverages are sold. The example of location of breweriesdescribes a very simple situation. When production is a compositionof several materials, e.g. ubiquitous, gross localised, and pure localised

(for details see footnote ), then a much more complex pattern risesbut; the basic principals are the same. The main gain from Webers minimum transport cost model wasthat he managed to model location within a heterogeneous surface.By stressing the difference between ubiquitous and localised material,Weber opens for an analysis of why economic activities tend on theone hand to cluster, and why, on the other hand, certain types of inputs

over the production process favours location within a specific area. The

minimum transport cost model was modified over several generationsand by various researchers up through the s, s and s, e.g.Lindbergs () on location patterns of pulp and paper produc-

tion in Sweden, Isards () transformation line which illustrates

possible combinations of location based on distance to market anddistance to resources, and Smiths () study on location patternsof manufacturing in England.

Localisation and urbanisation economiesof externalities and location

One of the best established approaches to explaining spatial patternsof economic activities would be the various forms of agglomerationeconomies. This theoretical understanding of why industries tend tocluster originates from Alfred Marshall and later Alfred Weber. Ad-

vocates of agglomeration economies argue that firms benefit fromexternal factors by locating in proximity to each other. The traditional,

highlighted advantages of agglomeration are transportation, commu-


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nication and services. However, external benefits can also originate

from location of a skilled and specialised labour force, organisationsthat provide specialised knowledge, specialised services, input-outputrelations etc. These factors differ from the traditional perspective on

cheap labour and materials in location economies. Agglomeration economies can be divided into two dominating di-rections. First, localisation economies are external to firms but

internal to an industry within a geographical region (Feldman, ,p.). Localisation economies can be understood as knowledge, la-bour pool, and organisational spillovers that are external to a firm but

internal to firms within an industry in a geographical bounded area.

Localisation economies relate to firms within closely related industriesand the basic argument is that co-location can help to spread new

knowledge codified and tacit as well as provide a large pool ofhighly qualified labour. Secondly, urbanisation economies can be seenas scale effects associated with city size or density. (Feldman, ,

p.). Urbanisation economies should be understood as effectsthatare external to industries but internal to a bounded urbanised area.Urbanisation economies are related to all firms in all industries, and

the basic argument is that density and diversity can help reduce searchcosts, on the one hand, and expose firms to unexpected events that can

bring along innovations on the other. Agglomeration economies alsohave a counterpart. Dis-economies of scale relate the disadvantagesthat firms might experience from being located in proximity to eachother. Pollution, rising land prices etc. are examples of this, but in

the following I will only address the positive effects of agglomerationeconomies.

Localisation economies

Localisation economies and urbanisation economies are two vari-

ants that have gained more important positions in economic geog-

raphy within the last three decades. One major reason for this is thework done by Italian regional economists on industrial organisation

in Northeast and Central Italy (e.g. Brusco, ). The Italian schoolreactivated the thoughts of Marshall on industrial districts performed

almost a century earlier. Eventually, this work inspired to the book The


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Second Industrial Divideby Piore and Sabel ()who identifiedtwo industrial divides based on technologies. Piore and Sabel ()argue that a shift in the capitalist mode of production away from

Fordist mass-production and towards specialised flexible production

systems favours co-localisation of production within the same indus-tries consequently arguing for location economies. The flex-spec approach is inspired by the work done by Alfred

Marshall on industrial districts in the th century England. Mar-

shall finds that some aspects of economic activities are difficult to

explain by straight economic rationality. He concluded that the suc-cess of some industrial districts could partly be explained by input-

output relations between firms, a pool of skilled labour, spillovers ofknowledge and by what has been called industrial atmosphere and inthe airmechanisms being factors which reduce transaction cost andstimulate informal networking to raise trust (Asheim, ). Piore

and Sabel () point to the competitiveness and flexibility of smalland medium sized enterprises (SME) within the same industry and

located within small communities. Findings from case studies of thegeographical co-localised SMEs suggest that strong social relations,

a flexible labour force and flexible machinery offer a competitive andflexible production system (Piore and Sabel, ). Flexibility withinthe system is found on several levels. First, a highly skilled workforceprovides flexible labour. Secondly, production organised around the use

of subcontractors provides a flexible production system, and thirdly,using CAM and CAD machinery provides flexible technology. All

this it is argued can be linked to social ties between the economicactors within the flexible network. Promoters of flex-spec stress thesocial dimension of the competitive systems, arguing that the em-

bedded nature of mutual understanding, trust, knowledge spilloversand knowledge exploitation are crucial for the competitiveness of thesystem. Consequently the flex-spec approach has a spatial dimension

3 The first industrial divide is identified in the late 19thand early 20thcentury

when mass production and mass consumption slowly started to overtake tra-ditional artisan production. The second industrial divide emerged in the 1970swhere mass production was overtaken by a flexible mode of production basedon flexible labour, machinery and organisation.


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which stresses the importance of co-location to obtain mutual trustand thereby harvest the fruits of localisation economies (Piore and

Sabel, ; Sabel, ). Critics of the flex-spec approach have pointed to the instability

of industrial districts in an increasingly globalised world (Tomaney,). Questions have been put towards the sustainability of smalllocal production systems based on trust and social relations when lo-cal firms tap into global networks or when small successful firms areovertaken by trans-national corporations. Others question the abilityof the local production systems to stay competitive for a longer period

of time because the tight relations that they build upon may reduce the

chances of acquiring new knowledge and hence successful innovations(Grabher, ). The flex-spec debate contributes with important insights on the

localisation debate by stressing the impact of social capital and thelink between social capital and geography. While the flex-spec argu-ment lost some interest from geographers in the mid-s, it did help

to put agglomeration and localisation economies on the agenda by

changing the analytical perspective from only addressing horizontal

learning (hierarchical) to also including vertical learning (input-outputrelations). Debates on industrial districts by Asheim (), Markusen

() and Harrison () among others, followed by conceptualisa-

tion of learning regions (Morgan, ), and regional clusters, (Malm-

berg and Maskell, ; Maskell and Malmberg, ), provided anew perspective on location dynamics and competitiveness by placing

localisation economies very central. The inspiration came from soci-ologists like Granovetters () and political scientist like Putnam(; ) who, with concepts such as embeddedness and socialcapital argued that economic transactions would be constrained bysocial relations. Additionally, inspiration from organisational econo-mists work on transaction cost theory (Coase, ; Williamson,

) entered the field of economic geography through Scott ()who argued that economic agents act opportunistically, which is whyall economic actions hold an element of uncertainty. Therefore firms

try to reduce uncertainty by integrating sub-production internally inthe organisation, if profitable, or by cooperating with firms that theyalready trust, because building trust is costly and time consuming.


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The cost of building trust between economic agents is one of the most

important insights that transaction costs have contributed within eco-

nomic geography. This literature argues that knowledge spillovers are facilitated by

social institutions like trust, and the social institutions are embeddedin the local or regional geography. Further, relations are strength-

ened by cognitive, geographical, institutional, organisational or social

proximities (Boschma, ). Moreover, this literature claims that the

overall institutional setup which underpins knowledge production and

knowledge diffusion and helps regions to become competitive is deeply

rooted in geography and space. Examples from Jutland in Denmark,

Gnosj in Sweden, Northern Italy, Baden Wurttemberg in Germanyand Silicon Valley in California USA suggest that social processesembedded in the regional structure provide favourable milieus for

innovation. The processes occur due to the embedded character of

spatially fixed assets and are thus difficult or impossible to replicate.Markusen () uses the term sticky about knowledge, and basedon studies from Germany and Canada, Gertler (; ) arguesthat exchange of knowledge is difficult across distance and in particu-

lar across cultures because knowledge is not always codifiable; tacitknowledge (Polanyi, ) is passed on by routines in combinationwith culture that calls for spatial proximity. Consequently, geogra-

phy and spatial proximity become central to understanding economic

activities, and being there becomes essential in order to acquire theknowledge that a given region possesses. Becoming embedded in local institutions and structures overnight is

impossible, however, and just being there is no warranty for becoming

a part of the localised knowledge-creating networks. It takes time totap into networks and pipelines of knowledge and to win trust. Ad-vocates of localisation economies argue that face-to-face interactionis critical for building trust, lower transaction costs and increasing

knowledge diffusion within production networks (Grabher, ).

Consequently, due to the embedded character of institutions, normsand values that constitute the localised knowledge producing net-

works and help to utilise the tacit knowledge the chances of access-ing knowledge increases with location within the local area where itis produced.


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Urbanisation economies

Urbanisation economies and the urban dynamics which it representsdiffer fundamentally from dynamics emphasised by advocates of lo-

calisation economies. Localisation economies rest on industry internal

spillovers, while urbanisation economies rest on spillovers external

to industries but internal to a bounded urbanised area. Contrary tolocalisation economies, studies inspired by dynamics of urbanisationeconomies suggest that social capital and strong ties can be obstruct-ing to the creation of new knowledge (Florida, ; Grabher, ).Knowledge creating networks need to be shaken now and then to

secure new inputs, and the strong ties that social capital facilitatesrestrict such new input, according to Florida (). The more loosely

organised networks of the city characterised by a thick and diverseaccess to knowledge is a strength according to advocates of urbanisa-

tion economies. Knowledge inputs from several different sectors willhelp innovation and thereby competitiveness. Further, the density ofmultiple economic activities raises the face-to-face contact between

economic factors which, in itself, is perceived to have a positive effect

on innovation and learning. Traditionally, cities are centres of service supplies. These service

activities are characterised by a considerably different organisation

of production and exploitation of knowledge compared to traditional

manufacturing, which has often been the main focus for studies in-spired by localisation economies (Gershuny, ; Bell, ). Glck-

ler () examines firms in knowledge-based business services andargues that because these services are not produced in value chainsbased on traditional input-output linkages, there is a need to developexplanatory approaches that are different from those based on a tradi-

tional understanding of transaction cost advantages and technological

spillovers etc. Service commodities are, for most part, produced andconsumed at the same time. Consequently, to understand urban loca-tion of service activities, Glckler () asks for a shift away fromthe traditional theoretical approaches on externalities that favour

technological know-how towards a relational understanding of theimportance of know-who. According to Glckler, this is necessary

because knowledge based business service firms do not innovate in


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laboratories but in close interaction with their clients. Therefore themarket place for knowledge services becomes intransparent and con-sequently know-whobecomes a vital form of knowledge that relatesto the interconnection of people and the quality of their relation

(Glckner, p. ). Glckers () notion of the advantage of knowing-who in

densely urbanised areas corresponds with Jacobs (; ) focuson diverse economic activities as the prime advantage of cities. Jacobs

() argues that cities are the most innovative places through history.

Large cities that offer diversity, i.e. externalities external to industries,

have shown to be competitive over time. Jacobs exemplifies this by

addressing competitiveness in Birmingham. Though no industrial spe-cialisation can be identified in that city it remains highly competitive,while highly specialised cities like Manchester witnessed enormous

problems in remaining competitive in the s. Basically, what Jacobs

argues is that a specialisation and concentration of specific industrieswill eventually lead to a negative lock-in situation, while diversity ineconomic activities will promote continuous innovation because eco-nomic actors are exposed to multiple ways of thinking and multiple

ways of producing. Jacobs ideas of diversity as a competitive advantage are often ad-dressed as Jacobs externalities in the literature. Boschma (;

) argues that negative lock-in can be avoided by the presence ofa diversified local knowledge base. Henderson, Kuncoro and Turner() identify a distinction between location of industries based onlocalisation and urbanisation economies. They argue that firms in

mature industries tend to locate where localisation economies are inplace, i.e. where spillovers within matching industries can be accessed.

On the other hand, industries in new fields of knowledge, e.g. high-tech industries, tend to locate in large cities characterised by diversestructures of economic activities. Consequently, the results based onHenderson, Kuncoro and Turner () are that localisation econo-mies are favourable in order to attract and retain mature industries,while Jacobs externalities are important when regions seek to attract

high-tech industries. Recently, Frenken et al. () and Frenken et al. () have

launched the conceptual idea of a related variety, arguing that the


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relatedness and diversity of regional industrial structures can facilitate

a high level of regional competitiveness and thus regional growth.

Related variety is best explained as a hybrid resting on urbanisationeconomies building on Jacobs externalities but adding insights from

localisation economies. Models that measure related variety do notonly look for diverse industries but also for the density of sub-indus-tries within every industrial sector; thereby the approach argues thatfirms can benefit from both firm and industry external spillovers, aswell as firm and industry internal spillovers. The critical volume andcombination of a related and diverse industrial structure are, accord-ing to Frenken et al. (), best found in larger city regions.

Creativity and talent

A string of deindustrialisation literature has been focusing on the

city region as central for innovation and the dominating economic

dynamics. In Scandinavia this debate has been most dominant in Swe-

den, where Andersson (), Andersson and Strmquist (), andTrnqvist (, ) have stressed the importance of cities for

knowledge-creating processes. Within recent years similar argumentshave gained momentum. Especially Floridas () work on cities

as caldrons of creativity have penetrated the academic debates and

beyond. Florida has two entrances to his understanding of regionalgrowth. Firstly, Florida is heavily inspired by Jacobs (; )

view on the importance of quality of place and tolerance. Florida

combines the two in his people climate concept. People climate is

conceptualised as tolerance through cultural diversity, and opennessand quality of place through architecture, pedestrian area, bicycle

tracks, cultural amenities etc. According to Florida (), people

climate is however not enough to compose a competitive region in

the knowledge economy. Therefore he introduces business climate asa supplementary to people climate. Business climate covers qualifiedlabour, business policy, industrial structure, universities etc. Florida

argues that the presence of these two types of climate is central to

underpinning a competitive economic milieu. Secondly, Florida (; a; b) acknowledges the work

done by regional and urban economists on the linkages between


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growth and knowledge. Romer () stated that knowledge and

growth could be linked to each other, and increasing returns could beaccomplished by investment in knowledge. These insights were takenfurther by Lucas () and Glaeser () who found that growth

is associated with the density and level of human capital. Human

capital is directly linked to the years of studying. Most often the levelof human capital is described by the share of people who have a col-lege degree or bachelor degree (Glaeser, ). Florida, however, seesthe definition of human capital as too narrow to describe the creativemindsets that bring along growth and prosperity. Florida argues thatgrowth is dependent upon innovation at least in a Western context

and that innovation and creativity are inseparable, and, consequently,the most creative occupations must be the ones that are linked to in-novation and hence economic growth. Therefore Florida introducesthe concept of the creative class based on people occupied in creativejob functions. Florida divides the creative class into two subgroups.First, the creative core is defined as people who have to be very crea-tive to fulfil their job. This group includes researchers, teachers etc.Secondly, the creative professionals are people who are more creative

by routine. These include administrative associate professionals, busi-ness professionals, lawyers etc. Florida links regions that experienceeconomic growth with regions that hold a high share of creative classpeople, and he further links location of creative class people to regions

that have an attractive people climate. Basically, Richard Florida argues that welcoming, diverse and open-

minded cities attract creative class people in large volumes, and largevolumes of creative class people attract investments in high-tech in-dustries leading to economic growth. Accordingly, Florida, like Glaeser

(; ) and Lucas (), identifies a positive correlation be-tween a group of people, highly educated or creative, and regional

growth. The difference between the human capital and creative capital ar-gument has, however, led to a discussion of old wine in new bottles.Glaeser () argues that the subdivision of the creative class, called

the creative core, is almost identical with his human capital concept,and further that this group shows the same correlations as Glaeserscalculations; hence, Florida is actually reinventing the well-accepted


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human capital concept. On the other hand, Florida argues that thecreative class concept is wider than the human capital and more ac-curate in regard to innovation because it does not discriminate between

people with or without higher education, but rather between the ex-

tents of creativity that people have to unfold in their work process. Empirical findings from Sweden (Hansen, ) demonstrate thatthe correlation coefficient between human capital and creative classpeople is . on a regional level based on data from , and highly

statistical significant. Consequently, human capital and creative classcan be understood as two concepts having almost equal geographicalcharacteristics in a Swedish context and most likely also in a Danish

context. Thus, we do not distinguish between creative capital and hu-man capital in the remainder of this book. Instead, we use the termtalent to cover both the formal and informal competences of labourwhen discussing the impact and geography of knowledge perceivedby the workforce. In the following chapters we will depart from foregoing discussedtheoretical understandings of the spatial outcome of economic ac-

tivities, and while this chapter should be understood as a conceptual

introduction, the next chapter should be seen as a contextual one.Together these two chapters provide the bedrock of the following

chapters.


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. The Rise of City Regions in Denmark

This chapter outlines the main features of the Danish economic andindustrial geography in the past two decades. The focus of the chapter

is on the recent economic and industrial resurgence that have occurred

mainly in the two dominant city regions: Copenhagen city region anda more diffuse city region in Eastern Jutland. Consequently, emphasis

is on the urban turn in Denmark. The urban turn and the rise of theservice and knowledge economy are visible in new geographical pat-terns of growth and decline that remains strong even after the finan-cial crisis in (Andersen and Winther, ). The current spatialdynamics with two dominant city regions are markedly different from

the spatial dynamics of s and s. The crises in the s andthe long period of transformation and restructuring of the economyin the s and early s gave rise to several new industrialisedspaces in Denmark, especially in small and medium sized cities outside

the large urbanised areas, often located in peripheral regions of thecountry first and foremost in Jutland. At the same time, the largestcities in Denmark including the Copenhagen inner city and city region

were suffering severe job losses and high unemployment rates largelybecause of a strong de-industrialisation process in traditional manufac-

turing industries (Andersen and Winther, ). The transformation of

the Danish space economy in the s and s has been thoroughlyexamined in a range of studies (Maskell, ; Jensen-Butler, ).The main conclusions of this transformation will be presented below.


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Since the early s, however, there has been a resurgence of the

large cities in Denmark in terms of growth in jobs and population,including Copenhagen inner city and city region (Engelstoft et al.,

; Andersen and Winther, ; Andersen et al., ). This new

pattern of urban growth and resurgence resembles the developmentin many other European countries and the USA, based on urbanisa-tion and agglomeration economies (Scott, ; Manville and Storper,

; Hall and Pain, ). The economic and industrial resurgence of

the large cities is based on the rise of the service, knowledge, culturaland welfare economies, together with new industries and new jobs

that include a strong growth in highly skilled jobs primarily occupied

by talents and creative professionals of which many have a universitydegree (the focus of the next chapter). In this chapter, focus is on therise of city regions and the history of the Danish space economy, afterwhich an examination of the past decades of changing economic andindustrial geography in Denmark in broad terms is presented.

The rise of city regions

Currently, much attention is given to how urban spaces transform into,for instance, polycentric structures, and how urban development ab-

sorbs existing cities in the surrounding areas, producing new centres

and places of production and living that, together, form large city re-

gions. These regions refer to large metropolitan areas that cannot be re-

duced to the densely built-up city, but include its hinterland that stretch-

es beyond the administrative and morphological boundaries of the city

and include functional networks of labour and capital. The city region

concept has recently been contested by numerous authors mainly situ-

ated in political and social geography (Jonas and Ward, ; McGuirk,

; McCann, ; Purcell, ; Jarvis, ; Krueger and Savage,

). One of the main critiques of the city region concept is its rather

uniform treatment of large cities and metropolitan areas competing in

the global economy which does not reflect the diversity and multiplic-

ity of economic, social and political processes producing large metro-

politan regions and the local political and social conflicts. The critiqueitself, however, also tends sometimes to treat the economic argument of

city-regions in a rather simplistic manner. We argue that the concept of


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city regions is not just problematic from a social and political point of

view, but also from an economic geographical perspective. Global city

regions cannot be reduced to cauldrons of innovation and creativity;

they are produced by a diversity of often interrelated economic activi-

ties and practices.

Two issues are important in discussing the economic geography ofcity regions. First, we think that the recent conceptualisation of cityregions in economic geography, with its focus on competitiveness inthe global economy, has emphasised the importance of (economic)

geography in making sense of the globalising world economy. Geog-raphy matters, and cities are vital places of innovation and creativity

(Jacobs, ; Scott, ; ; ; Florida, ; Storper, ),having great importance as economic strongholds in the national andglobal economy during the rescaling and re-territorialisation of eco-nomic and political powers (Scott and Storper, ; Jessop, ;Brenner, ; Storper and Manville, ). This, we believe, is animportant prerequisite for understanding the processes of competi-

tiveness and knowledge production in firms and industries, and forunderstanding how cities underpin the relational economic spaces of

firms and industries which increase their competitiveness. The problemis, however, that the city regions are sometimes reduced to space-

less, one-dimensional cauldrons of creativity and innovation with anexclusive focus on high-tech industries, advanced business services

and cultural and creative industries. The new fashionable knowledgeactivities are supported by local labour markets of talent and this isoften seen as the only pathway to the future growth and prosperity of

cities. This reduction of the complexity of the economic geographiesof city regions is manifested politically in the strategic plans of manycities throughout the world and is also evident in the literature of eco-

nomic geography and regional and urban studies. We argue that it isimportant to understand that even global city regions are produced by

many economic activities not merely the glamorously new high-end,

fast growing industries but also the dull, everyday life industries andthe supporting industries to the global competing industries. High-end

industries live in symbiosis with other industries that equally contributeto the urban economy and the success of the high-end industries withtheir services and labour markets. Hence, they facilitate basic necessity


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for production, contribute to the production of jobs and income andremain as important as ever. Second, city regions refer to large metropolitan areas. These areascannot in any way be reduced to the densely built-up city. They include

its hinterland that stretches beyond the administrative and morphologi-

cal boundaries of the city; for instance, the office of the Deputy PrimeMinister in the UK wrote: City regions are the enlarged territories

from which core urban areas draw people for work and services such

as shopping, education, health, leisure and entertainment. (Urban

Research, , p. ). The conceptualisation of the city region appears

in this context as having an epic-centre with the remaining urban

spaces being subordinate to the central place. We argue that the cityregion is being produced by many economic geographies and differ-ent urban forms that cannot be understood in terms of one centralplace with subordinated local centres and hinterlands. We emphasisethe relational spaces of the urban economy and suggest a movementtoward studies that examine, or at least reflect, for instance, on theinner city, suburbia and the outer city as economic, political and so-cial processes that are a part of the rescaling of divisions of labour,

industries and political powers in metropolitan regions. These are allinterrelated places that contribute to the production of the urban eco-

nomic landscape(s). Hence, we suggest a relational understanding ofplace, to analyse the economic geographies and practices of the (new)urban spaces, which emphasises the unboundedness of regions (Amin,

) and the distanciated networks, but also how places underpindifferent relational economic spaces, e.g. knowledge producing spaces,

production spaces, or the diversity of local labour markets. In Denmark, growth has been concentrated in two large urbanisedareas: ) the Copenhagen city region, and ) in a more diverse anddiffuse urban space in Eastern Jutland (Andersen et al., ; Nissenand Winther, ; Landsplanredegrelse, ). The Copenhagen

city region will be analysed in greater depth in Chapters , and ,including a discussion of various urban forms present in city regions.The city region of Eastern Jutland has recently been constructed as

a new urban space, a new Danish city-region, by national and localplanning authorities that recognised the economic potential for future

growth in eastern Jutland (Landsplanredegrelse, ), although


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the realities of a full blown city region are much more vague (Nissenand Winther, ). Below we analyse the main industrial changes

and developments of the two city regions and compare to the rest ofthe country. Before the analysis of the contemporary development a

short introduction to the history of economic geography in Denmarkis provided to frame the current resurgence of the city regions.

The economic and industrial geography of Denmark

Denmark has like most countries in Western Europe and North Amer-

ica experienced a stagnation, decline and relocation of manufacturing

production since the late s. The relocation was mainly from thetraditional industrial spaces towards new industrial spaces in primar-ily more peripheral regions or in new economic spaces closer to theold centres. The spatial restructuring of manufacturing was evident in

the USA with the relocation from snow-belt to sun-belt and the riseof new industrial spaces in Silicon Valley and Route . In Europethe relocation of economic activity and manufacturing was evident inparticular in the UK, Germany, France, Italy, Spain and the Netherlands

(Keeble et al., ) and evident in a range of studies of industrialdistricts (Brusco, ; Winther, ). Denmark was no exception in terms of relocation of manufactur-ing. Manufacturing production has in the post war years relocated

primarily from Copenhagen towards the rural and peripheral regionsin Denmark. These regions experienced employment growth and

greater economic prosperity than before, and this resulted in regionaleconomic convergence, as Copenhagen and especially the inner cityof Copenhagen suffered long term economic gloom (Andersen andWinther, ). During the s and s Copenhagen changedits position: from being the national manufacturing centre in the early

post war-years, Copenhagen experienced a long and considerable

phase of de-industrialisation, e.g. loss of manufacturing jobs and

firms. The de-industrialisation began in the s, and strengthenedduring the economic recession of the s, and continued steadily

throughout the s (Maskell, ; Winther, ). The processof de-industrialisation continues even today, although not at the same

rate as in the s and s. Several studies have revealed that the


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de-industrialisation process was also a restructuring process changing

the structure of the manufacturing sector. On the one hand, Maskell() showed that job loss was mainly due to firm closure and down-

sising in the traditional manufacturing industries. On the other hand,

Breum () and Jakobsen () proved that in the s there wasa significant start-up of new high-tech firms in Copenhagen compared

to the rest of the country. Further, the manufacturing sector continued

its decline in the central parts of the Copenhagen, whilst in suburbiaand the outer city (see chapter ) the sector grew especially in theouter city (Hansen and Winther, ).

This relocation has been examined thoroughly in the past decades.

The relocation of manufacturing was first really discovered in thelate s and early s, although it took off as early as the lates. Empirical studies from the s had already pointed out

the relocation of manufacturing (Illeris, ; Jensen, ; Jensen,; ) but up to the s the dominant discourse in regionalplanning and research was that economic activity concentrated in themain urban centres. The main discourse was supported by theories ofpolarisation and cumulative causation based on the seminal work of

Myrdal () and Hirschmann (), or of various Marxist andneo-Marxist positions that examined the uneven geography of capi-talism (Harvey, ; Massey and Meegan, ). The main percep-tion of the economic geography of Denmark was that Denmark hada traditional centre-periphery structure with a regional and urban

component (Jensen-Butler, ). Copenhagen was the main centre,while the larger cities, Aarhus, Aalborg and Odense, were consideredcentres of regional importance. The periphery was mainly considered

4 The other large, traditional urban, industrial spaces in Denmark such as Odense,Vejle, Aarhus and Aalborg were also heavily influenced by de-industrialisationin the 1970s and 1980s with a reduction in manufacturing jobs that almostmatched Copenhagen (Matthiessen, 1987). Matthiessen (1987) further demon-strates that most urban areas, with the exception of Herning and Ikast, Esbjerg,Frederikshavn and Hjrring (cities that later lost manufacturing jobs in the1990s), had a reduction in the number of manufacturing jobs in the 1970s

and 1980s, especially in the traditional industrial medium-sized cities such asSilkeborg, Nstved, Svendborg and Slagelse. The growth in manufacturing washence mainly a phenomenon outside the larger Danish cities, occurring in therural areas and smaller provincial towns (Maskell, 1986).


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to be the northern, southern and western parts of Jutland as well asthe smaller islands such as Lolland, Falster and Bornholm all withlow productivity and high unemployment. By the late s the re-localisation process was given more serious attention empirically and

theoretically. It was mainly the spatial restructuring of manufactur-ing that was in focus (Hartoft-Nielsen, ; Maskell, ; ;Christensen, ; Jensen-Butler, ; ; Pedersen and Illeris,

; Breum, ). During the s and s Copenhagen, therefore, changed itsposition. From being the national industrial (manufacturing) centre,Copenhagen experienced a period of de-industrialisation, including

a massive loss of manufacturing jobs. The de-industrialisation wasstrengthened during the economic recession of the s and contin-ued strongly throughout the s (Maskell, ; Winther, ).The process of de-industrialisation continues today, but not at the

same rate as in the s and s. Several studies have revealedthat the de-industrialisation process also was a restructuring processchanging the structure of the manufacturing sector. On the one hand,Maskell () showed that the job loss was mainly due to firm clo-

sure and downsising in the traditional manufacturing industr

the urban turn: cities, talent and knowledge in denmark

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