Spatially unbalanced growth in the British economy

Abstract

The financial crisis and consequential recession that brought the UK's long economic boom of 1993-2008 to a dramatic end have generated considerable debate about the need to 'rebalance' the economy, both sectorally and spatially. In this paper we examine the scale and nature of imbalance in the UK economy. We first review what different theories of regional growth have to say about the issue of spatial and sectoral imbalance. Next, against this background, the stylised facts of sectoral and spatial imbalance, particularly as between the South and North of the United Kingdom, are identified. We then use dynamic multi-factor partitioning methods to determine the relative contribution that sectoral composition has made to NorthSouth regional imbalance. In the light of our findings we argue that there is an urgent need for a clearly identified industrial policy that is coordinated with a regional policy that seriously begins to address the North-South imbalance in the UK's economy that has become so deep-seated over recent decades.

Entrepreneurship and the determinants of firm survival within regions: human capital, growth motivation and locational conditions

“…Various definitions have been used to understand and describe what constitutes a peripheral region, and the extent to which this relates to being economically -particularly in relation to the financial system (Gardiner et al 2013) -or geographically peripheral, although the two often coincide (Combes and Overman, 2004). Dinis (2006) describes peripheral regions as those that are distant and remote territories.…”

Continuing divergence after the crisis: long-term regional economic development in the United Kingdom

“…This long-standing problem emerges in several aspects: uneven geographical development, sectoral composition, balance between consumption and investment, between the size of the public sector relative to the private sector, and merits of export-led growth relative to domestic-led expansion (Gardiner et al 2013). A well-known feature of the UK regional problem is the so-called North-South divide.…”

“…The regional RCI variation in the UK is relatively high amongst the most developed EU countries, but this measure is moderate compared to South Eastern European countries, and even to France and Italy. Regional inequalities are historically high in the UK: they have been present since the period of industrial development in the 19 th century, and deepened during and after several periods of recession, as well as in boom periods (Marshall 1990, Gardiner et al 2013. The investigation of the spatial processes in the country allows us to draw important conclusions about sources and dynamics of economic disparities, providing useful lessons for other countries, as well.…”

“…There has long been a debate over the existence of a trade-off between spatial disparities and national growth in an economy, that is, whether policies aiming to reduce regional economic inequalities are efficient for the country as a whole (Martin 2008). The theoretical models of the New Economic Geography claim that uneven geographical development may create higher rates of national growth through various increasing returns effects stemming from the spatial agglomeration of economic activities (Gardiner et al 2013). For this reason, different courses of economic policy placed different emphasis on promoting regionally balanced economic growth in the UK (and, certainly, in other countries as well).…”

“…For this reason, different courses of economic policy placed different emphasis on promoting regionally balanced economic growth in the UK (and, certainly, in other countries as well). Gardiner et al (2013) argue that spatially unbalanced development and growth may bias or even compromise national economic policy, as it occurred in the UK during and after the global financial crisis in the second half of the 2000s.…”