Volume 33.

3 September 2009 809–26 International Journal of Urban and Regional Research

DOI:10.1111/j.1468-2427.2009.00888.x

DEBATES AND DEVELOPMENTS

An Integrated Model of Subnational

Regional and Urban Economic
Development: Framework of Analysis
AMEETA JAIN

Abstract
The mechanism of subnational regional and urban economic development has been
studied extensively by economists, geographers, town planners and other academics.
The existing widely varying theories of regional economic development are insufficient
on their own in explaining how a region can develop and prosper. Each theory has
evaluated a few facets of regional economic development. Research from these different
perspectives is narrow and prevents any cross-fertilization of research from these diverse
theories. Recognition of multiple factors affecting the development process has led the
author to create an integrated model of regional and urban economic development. The
essay first sets out to describe and explain this integrated model. Each of the components
of this new model draws heavily upon seminal work in the field. This model proposes
three rings. Each ring is at a different level of abstraction. The determinants of
development described in each ring can influence each and every other determinant of
development shown in the three-ring structure. This model recognizes that development
in any centre, be it regional or urban, nascent or established, is a composite end result
of the complex interplay of all the determinants. The essay then goes on to show how this
model can provide a broad holistic approach to regional economic development that can
assist researchers in their attempts to understand and link its various theories.

Introduction
The analysis of subnational regional and urban economic development is based on
building mathematical and theoretical models to understand and evaluate the drivers of
economic development. Once the mechanism of development can be understood, the
process may be amenable to modification by appropriately directed policy tools and
measures. There is also the potential to replicate the development and economic status
achieved by stellar regions. The same philosophy can then be applied to other regions
that are in the process of developing and those that have not been successful, thus far,
because of poor resource allocation or misdirected efforts.

I wish to acknowledge the constant support and encouragement of Associate Professor Jerry
Courvisanos from the University of Ballarat, Australia. He very patiently read multiple drafts of this
essay and provided helpful comments and constructive criticism.

© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd. Published by Blackwell
Publishing. 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main St, Malden, MA 02148, USA
810 Debate

While there are a number of studies that have looked at the development of regions
and cities on the basis of population (O’Connor and Stimson, 1995; O’Connor et al.,
2001) and many studies of regions that have developed on the basis of innovation
(Marshall, 1890; Lundvall, 1994; Cooke et al., 2004), there is no theory or model that has
explained subnational regional and urban economic development by combining the roles
of population and innovation as the major stimuli for growth. This model attempts to fill
this gap. Growth and development would appear to be eminently possible in both
situations: innovation-based and population-based. This new model integrates both types
of theories of regional and urban economic development.
This essay begins by defining development and subnational regions. It then evaluates
the various determinants of growth and growth theories, before presenting an integrated
model of subnational growth. This is based on an extensive review of the literature.
The model is discussed and explained, with examples throughout. In the next section, the
model is applied to Casey, a local government area in Victoria, Australia. The essay
concludes with a brief commentary on the usefulness of the model in understanding
development and its use in formulating appropriate government policy to encourage
growth.

Subnational local, regional and urban development

The model looks at the development of subnational regional or urban areas. It is flexible
and can be used to analyse the differing levels of influence of the determinants of
economic development. Economic development is a continuum, with each level of
geographic and political region interconnected to the other. Compartmentalizing the
economy into small parcels allows a better understanding of loco-regional processes
driving economic development. However, the impact of the world milieu or externalities
on the development process at any level cannot be ignored.
Governments at all levels collaborate with the private sector to stimulate, foster and
regulate economic development. The macro-level approaches to development include
regulation of taxation, trade, banking, tariffs and communications (federal government
responsibility in Australia), promoting development on a broad national level. The
development of infrastructure, vocational education and training, and regulation of
planning by the state governments is the responsibility of state governments in Australia.
Local economic development (Blair, 1995), also referred to as community development,
is the micro-level complement to the macro-level regional and national development
(Outer Suburban/Interface Services and Development Committee, 2008). Therefore,
local development leads to regional and, consequently, national development.
Conversely, local development relies on input from all levels of the government and
private sector, which cannot be viewed in isolation.
Hettne (1983) observes that development theory at a national level has evolved from
economic to interdisciplinary approaches. This can also be observed in regional
development theory at a subnational level. The definition of ‘development’, used to
formulate the early models at national and subnational levels, was traditionally
restrictive, as each model used a single criterion or a few set criteria to assess
development, such as gross domestic product or per-capita income. However, more
recently, development has been measured using a wide spectrum of parameters; for
example, quality of life indices, such as the United Nations human development index.
None of the traditional models can be adapted to measure the wide variety of
development indices in use. Another criticism of these models is that they tend to
evaluate a set of factors — or a single factor — that influences development, along with
how it operates. This has resulted in further modifications and refinements of each of the
major theories of development by subsequent authors. Even though the aspect of
development each model evaluates is done well, these models have, so far, not been able

International Journal of Urban and Regional Research 33.3

© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
Debates and Developments 811

to take a holistic approach due to their inability to incorporate the broader social and
environmental factors that impact on development, whether regional or national.
Traditional models of development, such as the Harrod-Domar model, see population
not as a driver of development but as a restraint (Hettne, 1983). For this reason, Nurkse
(1971) identified the need for massive and balanced investment for successful
development to occur. Such investment needs models that include structural factors and
provide a broader and holistic view of development.
When considering the development of such broader models, development theorists
have recognized that regions do not develop evenly across geographical space.
Development tends to occur with peripheral regions providing the labour and the central
regions prospering (Hettne, 1983). In the regional context, this can lead to an increased
divide between the rich inner-city areas and poor peripheral regions.
The proposed model provides a holistic view of subnational regional and urban
development that incorporates the concerns raised about traditional models discussed
above. This model initially aims to classify determinants of development into two broad
types: population and innovation. This broad classification is discussed in the next section.

Determinants of growth: innovation or population?

Does innovation generate growth?
Innovation has been seen to be the driver of successful economies. Innovation could be
defined as the transformation of an idea into a marketable product or service, a new or
improved manufacturing or distribution process or a new method of providing a social
service (European Commission, 1995). Innovation may be credited to a research scientist
or any other member of the production, sales or user teams. However, it is the entrepreneur
(private or public) who breaks down the barriers of resistance in society and succeeds in
using innovation commercially. The link between effective innovation and growth may be
difficult to prove, but there is circumstantial evidence supporting this hypothesis (Linder,
2006b). Cooke et al. (2004), and others (European Commission, 1995; Boddy, 2000;
Berry and Fleming, 2003) support the concept of innovation, in all its forms, as being the
main driver of development. Firms that have a large number of patents and are quick to
exploit them commercially, outperform the stock market (Linder, 2006a). What is true for
companies is also true for regions (Saxenian, 1985). Innovation in processes, products and
services results in improving the competitive advantage of the firm and/or the region,
sometimes resulting in product differentiation, amplifying or multiplying (see below) the
impact of innovation and flow-on economic growth.
The role of innovation in development is not recognized by earlier theories of regional
economic development (Marshall, 1890). The economic/export base theories and earlier
Keynesian models recognize the impact of innovation only as an exogenous factor that
cannot be explained in the model. The works of Perroux (1955) and Myrdal (1957)
developed dynamic theories of regional economic development that accept the non-
homogeneity of factors of production, the presence of externalities resulting in market
imperfections and a failure of the price mechanism to bring markets into equilibrium.
Perroux (1955) recommended that specific sectors of the economy be identified for
propulsive development and agglomeration. This results in increased innovation,
necessary for growth. Schumpeter (1939; 1942), Romer (1986), Porter (1990) and Reich
(1991) have all expanded and explored the role of innovation in the context of
development to such a degree that current theories and research accept innovation as the
sine qua non of regional economic development (Cooke et al., 2004).
Does population generate growth?
If the exponents of migration (departments of immigration of the USA, Canada and
Australia) are to be believed, population does generate growth (Stimson et al., 2006).
This is the main argument used currently to encourage immigration; in sharp

International Journal of Urban and Regional Research 33.3

© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
812 Debate

contradistinction to classical Malthusian theory (Malthus, 1798). An influx of population

increases the demand for infrastructure services (Mazur, 1994). The ageing of the
population changes the financial structure of the markets (National Bureau of Economic
Research, 2006), changes the socio-economic make-up of a region (Onge et al., 2006),
increases local spending and increases the stress on the local environment. Demographic
transition and its dynamics are the key to economic change (United Nations General
Assembly, 2006). Population is necessary for economic development (Simon, 1989;
Barlow, 1994). The two Asian powerhouses, China and India, are banking upon their
huge populations to drive their economies and dominate the world economy in this
century.
Does population or innovation drive the economy and make it sustainable in isolation?
It would appear to be intuitively true that innovation requires a population and a social
network to occur (Asheim and Isaksen, 2002). Even though population can drive
development of a nascent region, a critical mass of population is necessary for innovation
to drive development. Whilst innovation can be the brainchild of a solitary individual,
population is needed to make it commercially viable. Therefore, population- and
innovation-based development would appear to go hand in hand; each influencing and
modifying the characteristics of the other. There is no account of these linkages between
innovation- and population-based development in regional economic development
literature.

An integrated model
On extensive survey of the literature, it appears that none of the theories of subnational
local, regional and urban economic development are sufficient on their own in explaining
how a region can develop and prosper. Each theory evaluates a few facets of subnational
economic development. Recognition of multiple factors affecting the development
process leads to the proposal of an integrated model of subnational economic
development.
This model has many facets, as shown in Figure 1. Each of the components of this
model draws heavily upon seminal work in the field. It is important to try and explain
regional economic development using a holistic approach and accounting for the various
positive and negative influences on any given region. Each of these facets will be
discussed separately in detail. This model proposes three rings, with the peripheral or
outer ring being the most important determinant of development in any region. The
second or middle ring comprises interdependent determinants: labour, capital and
technology, basic and non-basic industry, local chambers of business and business
associations, population, universities and other educational institutions, exports,
innovation and finance. The inner ring or bullseye represents the final endpoint of
interaction of all these variables/determinants, regional economic development. The
creative classes (Florida, 2002) are treated as an externality in this model or exogenous
to the system, in due recognition of their migratory nature.
All the lines/arrows in this model are two way, emphasizing the bidirectional influence
of each determinant of development on the other. Each circle comprises determinants
that influence each and every other determinant of development shown in the three-ring
structure, including the creative classes, to change the degree and direction of
development. This model recognizes that development in any centre (regional or urban,
nascent or established) is a composite end result of the complex interplay of all the
determinants of development. This model is flexible in that it permits variations of its
basic tenets for the evaluation of different regions.
The outer ring comprises the three major determinants of development: natural factor
endowment, proximity to a nodal centre and government policy (see Fung et al., 1999;
Osborne, 2000). These three determinants of development are relatively more

International Journal of Urban and Regional Research 33.3

© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
Debates and Developments 813

CREATIVE
CLASSES

PROXIMITY
NATURAL TO
FACTOR NODAL
ENDOWMENT CENTRE

LABOUR
CAPITAL
TECHNOLOGY

BASIC
UNIVERSITY
INDUSTRY

LOCAL
REGIONAL CHAMBERS OF
POPULATION ECONOMIC COMMERCE/
DEVELOPMENT BUSINESS
ASSOCIATIONS

NON BASIC
INNOVATION
INDUSTRY

FINANCE

GOVERNMENT
POLICY

Figure 1 Integrated model of subnational regional and urban economic development

(source: Ameeta Jain)

independent than the others. While neither the proximity to the nodal centre nor
government policy can change the natural factor endowment, it certainly can and does
affect the utilization and exploitation of natural resources. The distance between a region
and the nodal centre is fixed. Government policy is often a result of the applied political

International Journal of Urban and Regional Research 33.3

© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
814 Debate

economy of the entire country and does not necessarily reflect the specific needs of the
region (Osborne, 2000). The second-ring determinants of development can influence the
outer ring to a limited degree. The interplay between these three determinants will affect
the second ring or tier of determinants of development; considered in this model as the
direct immediate pathway to development.
Beginning at the outer ring, we first look at the natural factor endowment as a crucial
element. Regions rich in resources, such as Western Australia and Southern Africa, will
benefit from their natural endowment but only if government policy permits exploitation
of these resources. Further, the manner in which these resources can be mined will be
affected by government policy and the nearest nodal centre. In Southern Africa, the issue
of political stability will be more important than in Western Australia, where
environmental concerns of both the government and resident population will affect the
nature of mining operations.
The very nature of government, democratic or autocratic, can influence the path that
development takes (Sen, 1999). Sen illustrates, with numerous examples, how
democratic processes give the freedom to choose and make decisions which ultimately
lead to more stable and long-lasting development. In contradistinction, similar short-term
results may be obtained in an autocracy. India and China have developed quite
differently. The former as the world’s largest democracy and the latter the largest
autocracy exemplify the influence of government policy and the socio-political milieu.
Further, the nature of local and subnational leadership, including government,
entrepreneurial, social and innovative, also influences the nature of economic
development, not least by influencing government policy and involvement (Kaufman,
1975; Fisher et al., 2005). Government policy also determines the nature of public–
private partnerships, popular in the last two decades to encourage local economic
development (Walzer and Jacobs, 1998). The interplay between local and government
leaders, entrepreneurs and other regions (externalities) is what has been described as a
growth machine (Molotch, 1976).
Any government development policy needs to be viewed in the context of a social
order in a region or nation. Social order, with a coherent system of rules, is a prerequisite
for any economic system to develop (Hettne, 1995). Where there is a transition between
social order and the political system of a region, for example the former USSR in the
postcommunist period, markets reflect the political turbulence (Hettne, 1995). This is
why regions such as oil-rich Nigeria, which have a poorly formed social and political
order, have not developed in any manner or form.
Lack of funds for any reason, including government policy, distance from the nodal
centre, and lack of financial institutions, entrepreneurs or venture capitalists will also
reduce the development and commercial exploitation of natural factor endowment.
Finance may not be available as a result of government policy restricting funds, lack of
interest in investment in the region because of its political economy (Hettne, 1995), lack
of venture capitalists and entrepreneurs, which are situated in the financial nodal centre,
or the region’s geographical attributes (Osborne, 2003). Financial investment in a region
is initially a result of the three determinants of development in the outer ring in this
model. Once a critical mass of population and industry is reached in a given region, then
the second-ring determinants can exert a greater influence in attracting investment.
The remoteness of Kalgoorlie,1 a mining town of about 30,000 people, resulted in
innovative methods of service and goods delivery from the nearest nodal centre, Perth.
Kalgoorlie’s remoteness and the richness of its resources resulted in innovative new
employment and pay structures being developed (a few weeks working, then a few weeks
off; paid return airfare to Kalgoorlie). The characteristics of the outer ring determine how
the middle-ring determinants are brought into play for regional economic development.

1 Kalgoorlie is the centre for gold mining in Western Australia and home to the world’s third largest
nickel smelter. It is located nearly 600 km from Perth, the nearest capital city. It has about 7,000
homes.

International Journal of Urban and Regional Research 33.3

© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
Debates and Developments 815

Whilst everything revolves around the mines, the process of development can be
explained by the interplay between all the determinants of development, as discussed in
this model.
This integrated model considers the social, political and cultural make-up of all
regions (peripheral and core/nodal) as being crucial in development. It accepts that
agglomeration will affect the nature of industry in a nascent region, by virtue of spatial
proximity to the nodal region and also due to cluster formation within the region or with
industry outside the region. The inherent nature of factor endowment and of the populace
changes slowly over time; the skill set and the values persist for a long time and are
valuable in directing development and innovation.
For a regional centre, the proximity to a nodal centre, with the nearest large
population, is a crucial outer-ring determinant of development, as seen in Figure 1. This
can be considered as an extension of the location theories of von Thünen (1966), Weber’s
theory of industrial location (1909), Christaller’s theory of central market places (1933)
and Hotelling’s spatial competition theory (1929). All these regional development
theories raise the issue of the optimal distance from a nodal centre in order for industry
and agriculture to develop. In the context of regional development, where the region is a
state or a country, this concept can be used to explain development. However, in the
current globalized world, with no region/state/country being self-sufficient and all being
reliant on trade for survival, the proximity of the nodal centre is not that significant, and
can be more distant then in the past (McDougall and O’Connor, 2005). This is certainly
the case for the linkages between Bangalore and Silicon Valley. Both regions have
developed as software centres, Silicon Valley being the primary site. Bangalore has
subsequently developed due to reverse migration and an increasing skill set of the local
population in information technology.
The concept that markets drive development, conceptualized initially by the von
Thunen and Weber theories, is expanded upon in this model. The nearest nodal centre is
the market for the goods and services being produced, be it for direct consumption or for
export and profit. Additionally, the nodal centre would be the market from which the
population/labour is sourced for the peripheral centre. This model also realizes that
market forces alone are not enough to drive development. Government intervention and
support, as suggested by Keynes, are part and parcel of any successful development.
The middle or second ring comprises what is considered, by this model, as the second
tier of determinants of development. Each will be outlined separately, starting with the
population determinant of development.
The presence of an adequate number of people with the appropriate skill sets is crucial
in the success of a region. Peripheral or non-core suburbs exist in all large metropolitan
cities. They suffer high unemployment and poor employability of their populace (Maher,
1997). At the same time, there are vast tracts of fertile land, such as the Tasmanian
highlands, where population is sparse despite the land’s fertility. Such areas are unlikely
to have rapid development. The USA was developed over the last three centuries due to
the population migrating West from Europe. In order to keep its development advantage,
the USA has refined its immigration policies to reflect the shortage of skills in the country
(Tichenor, 2002).
The quality of the population does have a significant influence on the development of
a region, its industry and long-term sustainability (Saxenian, 1985; de Laurentis, 2006).
It is very difficult to change the complete skill set from steel production and engineering
to information technology. A successful region modifies its competitive advantage by
diversifying (Cooke et al., 2004). The nature of existing industry in the region and the
nearby nodal centre influences the development of the dominant skill set in the region, as
there is a market for these skills. Alternate skills may not be of much value in the region.
The cohesiveness and networking that exist in population groups are a reflection of
their social capital (Field, 2003). Communities with higher social capital have a shared
lifestyle, a sense of community and strong social cohesiveness. This promotes social and
political order and lays the grounds for a stable political and social environment

International Journal of Urban and Regional Research 33.3

© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
816 Debate

necessary for development2 (Outer Suburban/Interface Services and Development

Committee, 2006). This concept can be extended to include business and trade
associations, which are discussed separately below. Further, the nature, quality, skill set,
political economic and social aspirations of a population will influence their eventual
development trajectory (Massey, 1994). External interference by governments, without
due consideration to these factors, will result in failed policy. For instance, in the state of
Victoria, there is a push towards knowledge-based industry; however there is a significant
lack of adequately trained labour, which requires an increase in the number of training
positions at universities and TAFE3 colleges to produce appropriately trained workers
(Outer Suburban/Interface Services and Development Committee, 2008).
Universities and other educational institutions, such as TAFE and technical colleges,
are the second inner-ring determinant of development. These institutions provide
teaching and learning opportunities, becoming assertive in the community they are
involved in by providing leadership (Garlick, 1998; Gunasekara, 2006). They are centres
for research and training. Involvement of these institutions is vital in overcoming local
skill shortages through the provision of appropriate training courses and advancing new
ideas that can be developed.
Other more traditional courses provide training and skill sets which may not be in
immediate short supply but which can potentially attract industry and businesses to the
region. This has been the experience of India, where a large pool of English-speaking
graduates with information technology skills and low employment has resulted in an
explosion of back-office operations and call-centre outsourcing in the last decade
(Kobayashi-Hillary, 2006).
The third inner-ring determinant of development is labour, capital and technology.
The availability of appropriately skilled labour at a competitive price is the driver for
outsourcing (Felbinger and Robey, 2001; Kobayashi-Hillary, 2006) and the adaptation of
new technology for local development (Keller, 1996). The influx of such labour, for
whatever reason, can improve development in the region. Immigration has been used to
acquire the appropriate labour in the USA in order to maintain its competitive advantage
in the high technology industry.
Availability of capital is vital for the development of infrastructure, followed by basic
and non-basic industry. The major sources of finance could be governments themselves,
financial institutions (both local and international), residents, entrepreneurs and venture
capitalists (OECD, 2006). Government intervention may be more relevant for nascent
economies (Fung et al., 1999) or regions where there is a shortage of entrepreneurs
(Cooke et al., 2004). Again, government policy dictates what sources of funds are
available for development in any given region.
The role of technology in driving economic development is recognized by both
governments and academics (Malecki, 1997). Silicon Valley and Bangalore have
developed due to cutting-edge information technology (Saxenian, 1985; Arora and
Athreye, 2002). The import and uptake of new technology is influenced by government
policy. Well-recognized subsidies for technology development include tax breaks and
grants for research and development. The nature of technology used at the nodal centre
can certainly influence the type of technology development in a given region (e.g.
software in the hinterland of Silicon Valley, nanotechnology in New Jersey), and
educational and research institutions play a significant role in the development of new
technology (Garlick, 1998; Heidenreich and Krauss, 2004).

2 A recent report to the Victorian Parliament entitled Building new communities (Outer Suburban/
Interface Services and Development Committee, 2006) supports this position.
3 TAFE: technical and further education institutions established in Australia provide apprenticeships
and pre-apprenticeships in engineering, hospitality, horticulture, building and construction,
plumbing, diplomas and certificates. They offer flexible and part-time learning, both for the general
public and industry.

International Journal of Urban and Regional Research 33.3

© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
Debates and Developments 817

Once there is a critical mass of population, both basic (Alexander, 1954) and non-
basic industry (Mazur, 1994) develop in the region (Simon, 1989), influenced by the
milieu of the nearest nodal centre and all the other determinants shown in the model.
Both of these next two inner-ring determinants of development are therefore discussed
together. The central tenet of economic base theory — that exporting or basic industry is
responsible for development — can be seen in this model. In this context, exports can be
to neighbouring regions, interstate or overseas. An increase in exports leads to increased
jobs, increased spending, increased demand for basic services and industry, increased
population, labour capital and technology. This ultimately affects the utilization of
natural endowments and government policy and the interaction with the nodal centre. If
the region in question is itself a nodal centre, then the nature of its trade and government
interaction with the nearest next nodal centre will change. Further development of both
basic and non-basic industry is contingent on the availability of finance from the
population and institutions within the region (Degryse and Ongena, 2005), the
government or external investors. In the absence of adequate funds, even the most
profitable natural resources cannot be exploited. Non-major metropolitan regions, which
suffer from a locational disadvantage, often do not have access to adequate venture
capital, government and public money to allow them to implement change or develop
economically (Ughetto, 2006). Further, the skills to lobby governments and float public
share issues reside mainly in the major financial and industrial centres, located in major
nodal centres, often capital cities. This can, therefore, explain the reason why regional
and non-core centres lack access to adequate funds and financial institutions. A further
corollary of this is that, in the absence of finance, innovation suffers; even if there is
innovation, its commercial exploitation may be conducted by external parties. This is
seen in Europe, where local research is commercially exploited by American firms and
venture capitalists, with little reward reaching European researchers (Cooke et al., 2000).
Innovation-based literature recognizes the role of local chambers of commerce and
industry and business support groups. Local chambers of commerce and business
associations have proven to be vital in established economies. These are of particular
importance in regions dominated by small and medium enterprises (SMEs), such as in
Italy (Braczyk et al., 1998; Cooke et al., 2000; Otatti, 2004; Dalziel, 2006). These
associations provide a forum for the expression of the needs of local SMEs. They provide
training and learning opportunities, tax-planning services, knowledge, exposure to new
technologies, and showcase local products and services to potential markets. In essence,
these associations function like knowledge-distribution nodes, marketing centres and
resource centres, all at the same time (Bacaria et al., 2004). Even though the descriptions
of the role of business support groups are from established economies, it is anticipated
that they would play a similar role in nascent regions. The local chambers of commerce
and business associations reinforce the role and function of local governments.
This model recognizes that innovation can be both endogenous and/or exogenous to
the system it also recognizes that development can still occur in the absence of
innovation. Innovation per se is not an essential determinant of development; the
presence of innovation in any form, however, will accelerate development (Schumpeter,
1939; Cooke, 2001). Technical innovation resulted in the well-recognized high
technology and software cluster in Silicon Valley (Saxenian, 1985). Gold Coast
(Queensland, Australia) is developing almost exclusively on the basis of its weather and
tourism: its development is predominantly population based (Stimson et al., 1998).
Clusters and innovation systems, which are considered the raison d’être of development,
have a place in this model: as components of the basic and non-basic industry
determinants. This model does not distinguish between clustered and non-clustered
industry, but accepts that the presence of clusters and innovation systems has a positive
influence on development.
This positive influence is significantly impacted by the level of interaction of all
stakeholders in the system. This is called institutional thickness, and is considered an
important predictor of development (Amin and Thrift, 1995). This ‘thickness’ includes

International Journal of Urban and Regional Research 33.3

© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
818 Debate

institutions, dissected out in this model, such as universities and teaching institutions,
local chambers of commerce and industry, existing basic and non-basic industry, and
their interactions. This model extends this to include the effects of other determinants of
development as shown in Figure 1.
Finance, the last determinant in the inner ring, is increasingly multi-sourced.
Governments are no longer the sole source of finance. Public–private partnerships
(Walzer and Jacobs, 1998) are increasingly relied upon for large infrastructure and other
developmental projects. In effect, these partnerships are a result of government policy,
with finance made available from both government and non-government sources, for
basic and/or non-basic industry. Inspirational local leaders and entrepreneurs can be the
driving force for innovation, development of industry or development of infrastructure,
all of which have significant multiplier effects for the local economy. Both leaders and
entrepreneurs are a part of the overall population stock of a region.
The creative classes (Florida, 2002), by their very character, are well heeled, mobile,
highly qualified and innovative. They are exogenous to the system in this model. They are
like free radicals, attaching themselves anywhere to the system, attracted by increased
activity and increased development. They are important but not considered essential for
development. Creative classes are responsible for accelerated innovation and,
consequently, development. However, innovation is not the exclusive purview of the
creative classes. Even in their absence, economic development is possible, though it may
not be as rapid as it could be with input from this class of population.
By putting all the determinants together, we have developed an integrated model of
regional development. Contrary to previous models, this model recognizes that both
population and innovation can drive development. Similarly, even in the absence of
population increase or innovation, change in other factors described in the model can
have a positive effect on development. For example, increase in availability of finance,
increased exports due to a change in the exchange rate of the local currency, the
discovery of new natural resources, improved infrastructure and changes in
government policy may, in isolation, increase development. This model recognizes that
development is multi-factorial and a complex interplay of all determinants. Whilst it is
a theoretical model, it follows from first principles that this acknowledges the
variability and externalities in the real world and can be applied to every region. For
example, Canberra4 has developed as a management and political centre, purely on the
basis of government policy, with change in population dynamics, followed by
increased demand for non-basic goods and services. This model recognizes that
development can be government driven, where governments take decisions to invest in
a region such as Canberra and develop it as a management and political centre, in the
absence of any existing infrastructure, basic or non-basic industry, resources or pre-
existing industry. Population migration to Canberra is only on the basis of jobs and
opportunities created by the federal government and not on the basis of any natural
factor endowment, industry or proximity to a nodal centre. Canberra is a purpose-built
town with no pre-existing population.
This model recognizes that there is no single final common pathway for economic
improvement. For example, innovation can reduce the number of jobs but, paradoxically,
increase the per-capita gross regional product. Further, the assessment of development
can use any measure necessary for the study: job and firm numbers, quality of life
indices, gross domestic product, per capita income, infrastructure, utilization of high
technology products, education levels, health and nutrition, or any other new measure of

4 Canberra is the national capital of Australia and the seat of parliament. It was built in response to
the historic rivalry between Melbourne and Sydney, both competing to become the capital of
Australia on Federation. In 1908, by an Act of Parliament (until then in Melbourne), the sparsely
populated City of Canberra was selected as the site for the future national capital. Canberra is now
a thriving city of about 300,000, with the primary employer being the Federal Government of
Australia.

International Journal of Urban and Regional Research 33.3

© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
Debates and Developments 819

development. Broader definitions of economic development include measures of quality

of life and equity (Blair, 1995) and freedom (Sen, 1999). Admittedly, the nature of
freedom enjoyed by any population is determined by the very nature of the political
process and government of a nation. The curtailment of the freedom of choice in any
sphere of activity will skew development.
The holistic model recognizes that the system is open to influence from outside in a
globalized economy. The externalities that this model recognizes are changes in the
world economy,5 national and international government policy, international demand and
supply of goods and services, development of new products and services that may
provide new competition to the products and services of the studied region and external
innovation. This model also recognizes that labour, capital and technology are not
perfectly flexible and mobile, in contradistinction to neoclassical theory. Further, this
model also considers labour, capital and technological change as being endogenous to
the system, unlike the neoclassical theories.
This theoretical model can be used to explain regional economic development for a
nascent region, irrespective of its geographic, spatial and natural endowment. It
acknowledges the role of government policy in shaping the region. Minor changes in the
effectiveness of government policy have the potential to have far-reaching consequences
for any region and its development.
Government business support policies and grants result in the initial development of
new suburbs by, first, changing land use and making it available for residential and
industrial development. Next, government policy shapes the provision of labour capital
and technology by the provision of training for businesses and their employees. Building
education infrastructure, such as TAFE and university departments, allows for the
training of the local population with the requisite skill sets needed by the local
community and businesses. The government (predominantly state and federal
governments) can give, by adequate policy measures, appropriate tax breaks and other
aid to businesses. Often, this is in the form of trade and land subsidies. Even though
Australia is moving away from business subsidies in general, some subsidies, such as
research and development grants and small business assistance, are becoming more
important. Government policy is a strong determinant of the nature of both basic and
non-basic industry. Good programme utilization and uptake results in successful policies
that lead to business development, with the ultimate aim of overall regional economic
development. Business development is facilitated by the local chambers of commerce
and industry and business support groups (Braczyk et al., 1998; Cooke et al., 2004).
These institutions are vital for the survival and development of local industry and
business as described above. As this essay was being finalized, it was evident that the
fall-out from the 2008 global financial crisis, through the loss of local jobs and
decreasing incomes, was forcing governments to move away from a neoliberal stance to
a more interventionist policy.

The fellowship of the rings

The three levels of abstraction presented above denote the theoretical independence of
each of the determinants of development. The three determinants described in the outer
ring are more independent than the determinants in the second ring. Any change in one
is likely to impact on all the other determinants of development in some way. Each
determinant of development is important in its own small way. This model provides for
a broad understanding of the process of development. It also follows that, in any given

5 In this context, the local and regional economic effects of the 2008 global financial crisis and the
stock market crash can be easily explained. The reduction in cash flow, reduced incomes, reduced
demand, fall in house prices can all be explained.

International Journal of Urban and Regional Research 33.3

© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
820 Debate

circumstance, the impact of any particular determinant of development will depend on

the sum total of the activity of all the other factors.
Even though, for any given region, one of the many factors affecting development
listed and described in the section above may be dominant, the others cannot be
forgotten. Rich natural resources for which there is a market drive development,
irrespective of their proximity to the nodal centre. However, the proximity to the nodal
centre determines the nature of development. Again, economic development will be
dictated by government policy. This is facilitated by the local business support groups
and the chambers of commerce and industry. Development requires population, skilled
labour, technology, capital and education, all initially sourced from the nodal centre. This
is essential for the development of industry in any shape or form, which will lead on to
the export of goods and services. Export of goods and services results in increased gross
domestic product for the region and insulates the region from local economic downturns.
This results in increased population and eventually the arrival of the creative classes. In
the background, processes and procedures undergo incremental innovation, often not
recognized, to improve the delivery of goods and services.
Economic development of any region results in an increase in its influence on
decision-making and government policy promulgation. Creation and maintenance of the
competitive advantage of a region requires input from all stakeholders. An amicable
fellowship between the members of each ring is necessary for economic development.6

Application of the model to the City of Casey

The City of Casey is the largest local government area in the Melbourne Statistical
Division (MSD) in terms of population (Australian Bureau of Statistics, 2007). It is
distinct in its factor endowment (demographic profile of residents, existing businesses
and support groups) and geography. Casey is located along the Monash freeway South-
East of Melbourne central business district (CBD). There is a direct train link between
Melbourne CBD and Casey, on the Pakenham line, providing the major public transport
alternative to private road transport. Casey also has rolling parklands, seashore and
foothills.
Casey has developed as a result of the federal and state government decisions to
encourage urban sprawl (Forsyth, 1999). Cheap land has been made available as a result
of government policy, along with public infrastructure (Frost and Dingle, 1995;
Department of Infrastructure, 2002). Land previously designated as rural or agricultural
land and crown land has been released for the development of new housing estates,
resulting in this population growth from the nearest nodal centre, Melbourne,
immigration and drift from provincial areas. People and industries have migrated to
Casey because of the cheap land available and its location on the freeway. Casey is also
ideally situated for the location of logistics warehouses between the two Victorian ports
of Melbourne and Western Port. Land has also been developed by the Casey Council as
industry and business parks.
The labour, capital and technology for the development of this subnational region are
sourced predominantly from the nearest nodal centre, Melbourne. The demand for local
teaching and university campuses resulted in the establishment of the Berwick Campus
of Monash University and the Chisholm Institute of TAFE. These institutions provide
courses and training required by local industry, leadership by way of Monash University
Business Group and information sessions. Multiple local chambers of commerce and
industry associations support development and sustenance of local businesses. They act
as intermediaries between the various layers of government, provide information and
guidance to businesses and feedback to the government about their policies.

6 With apologies to J.R.R. Tolkien, author of the The Fellowship of the Ring.

International Journal of Urban and Regional Research 33.3

© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
Debates and Developments 821

Finance for the development of local infrastructure comes from the state and federal
governments. Since public–private partnerships are on the increase, private funding is
made available predominantly from the CBD of Melbourne and other capital cities.
Business development, research and development attract finances from the CBD of
Melbourne and other state capital cities in Australia. Government funding for research
and development is mainly targeting the synchrotron facility in the neighbouring local
government area of Monash, with little research funding being spent in Casey. Thus, the
multiplier effects of the synchrotron have not been felt thus far in Casey.
Since its formation in 1994, the initial drive was to increase the local population by
way of increasing land available for housing estates. The City of Casey initiated research
on home-based businesses in the South-East region of Melbourne (Hitech Marketing
Services Pty Ltd, 1998). The economic importance of these businesses to the region was
recognized. In 2002, the C21 vision was launched by the City of Casey (2002a). This
provided a strategic direction for economic development in Casey. In the same year, the
city council adopted its first business development strategy (City of Casey, 2002b). This
emphasized that diversification of the industrial base was important for the region. This
was based on the home-based business training surveys (2000, 2001), Casey Business
Technology Audit (2001), Industrial Wholesale Audit (2000), Horse Racing Industry
Needs Project (1998) and the Cluster Identification Strategy (2000). The City of Casey
has taken a proactive role in trying to understand the needs of local businesses and
developing appropriate support strategies. However, given the lack of finances, the City
of Casey is unable to provide any substantive fiscal support. So far, there is no large
industry or business that can claim to be the major employer in the region. The current
lack of any such business is a composite result of the interaction between federal
government policy, the inherent factor endowment of Casey and international events,
similar to other peripheral regions in Australia (Maude, 2004).
The City of Casey profiled the industry in the region by a survey in 2004. A coherent
business attraction policy was developed (City of Casey, 2005). This was in recognition
of the role that the council needs to play in the current neoliberal climate. This policy
aims to attract businesses and investment that will provide Casey’s residents with
high-quality employment and career-development opportunities. From 2006, the City of
Casey has changed its emphasis from housing development to business attraction.
The government decision to reclassify the region as housing land, instead of
agricultural, has resulted in a large number of new housing estates. However, the
neoliberal market-driven philosophy has not seen any significant business or industry
development that would be able to make Casey self-sustaining. Government intervention
is needed. The economic situation of the City of Casey at the end of 2008 is similar to
Western Sydney in the early 1990s (Hodge, 1996). Healy and O’Connor (2001)
concluded from a review of jobs and housing location in Melbourne that emphasis on job
growth and community facilities in peripheral suburban regions like Casey is needed to
make them self-contained.
Keynesian policies that were useful after the great depression are now required to
increase the economic development of Casey, particularly in this recessionary economic
climate. Any funds made available for the development of businesses and industries are
provided mainly by the federal government (Maude, 2004). The state and local
governments have a number of policies and information sites but no real money. Further,
Australia does not have access to supra-national funds, as is the case in Europe (ibid.).
Access to government finances is necessary for research and development, educational
institutions, infrastructure, research and development. Macro-level initiatives, such as
region-specific tax breaks or other initiatives, as are routinely provided to the car
industry, are needed to make cities such as Casey self-sufficient.
The economic development of this local government region was primarily on the basis
of population factors thus far. The push towards business development and attraction is
hampered by the lack of a financial carrot that the government can provide industry. If
successful, this may well be able to change the direction of development in the future. All

International Journal of Urban and Regional Research 33.3

© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
822 Debate

of this can be easily explained by our integrated model of subnational regional and urban
economic development.

Conclusion
This integrated model recognizes the many determinants of regional economic
development. A complex interplay of these factors results in the ultimate goal of regional
economic development. This model can be used to explain development in any region,
state or country. Each ring of the model can be expanded to evaluate the effect of changes
in any of the determinants of development. Empirical analysis of any region will confirm
the robustness of this model.
Once the reasons for the development (or absence of development) of any region can
be understood, then it is easier to formulate appropriate government policy to improve
economic development. If one of the factors for regional development identified in the
composite model can be shown to be absent, i.e. business networks or training, then
governments can address the issue using the model. For example, they can provide
incentives and mentoring to develop business networks, and support training and
education programmes to address skill shortages. The aim would be to see how these
factors link into all aspects of regional development using the composite model. An
approach of this kind in a globalized world, where local embeddedness of industry and
services is needed to create and preserve competitive advantage, is necessary. This will
then eventually result in better and sustainable business development, which is required
for sustainable economic development for any region.

Ameeta Jain (ameeta.jain@deakin.edu.au), School of Accounting, Economics and Finance,

Deakin University, 221 Burwood Highway, Burwood, Victoria 3125, and School of Business,
University of Ballarat, PO Box 663, Ballarat, Victoria 3353, Australia.

References
Alexander, J.W. (1954) The basic–nonbasic
concept of urban economic function.
Economic Geography 30.3, 246–61.
Amin, A. and N. Thrift (1995) Globalization,
institutional thickness and the local
economy. In P. Healey, S. Cameron, S.
Davoudi, S. Graham and A. Madanipour
(eds.), Managing cities: the new urban
context, John Wiley and Sons Inc.,
Hoboken, NJ.
Arora, A. and S. Athreye (2002) The software
industry and India’s economic
development. Information Economics
and Policy 14.2, 253–73.
Asheim, B. and A. Isaksen (2002) Regional
innovation systems: the integrating of local
sticky and global ubiquitous knowledge.
Journal of Technology Transfer 27.1,
77–86.
Australian Bureau of Statistics (2007)
Regional population growth 2005–2006,
3218.0 [WWW document]. URL http://
www.ausstats.abs.gov.au/ausstats/
subscriber.nsf/0/3ACC0CC56B1324
E1CA25728E0014DABF/$File/32180_
2005-06.pdf (accessed 28 February 2007).
Bacaria, J., S.B. Alomar and A.
Fernandez-Ribas (2004) The changing
institutional structure and performance
of the Catalan innovation system. In
P. Cooke, M. Heidenreich and
H.J. Braczyk (eds.), Regional systems
innovation. The role of governance in a
globalized world, Second edition,
Routledge, London.
Barlow, R. (1994) Population growth and
economic growth: some more
considerations. Population and
Development Review 20.1, 153–65.
Berry, M. and D. Fleming (2003) Innovation
by design: the economic drivers of
dynamic regions [WWW document]. URL
http://search.informit.com.au/
documentSummary;dn=047904776317997;
res=E-LIBRARY (accessed 11 December
2006).

International Journal of Urban and Regional Research 33.3

© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
Debates and Developments
Blair, J.P. (1995) Local economic
development analysis and practice. Sage,
Thousand Oaks, CA.
Boddy, M. (2000) Technology, innovation and
regional economic development in the
state of Victoria. Government and Policy
18.3, 301–19.
Braczyk, H.J., P.N. Cooke and M.
Heidenreich (1998) Regional innovation
systems: the role of governances in a
globalized world. Routledge, London.
Christaller, W. (1933) Die zentralen orte in
süddeutschland [Central places in
Southern Germany]. Gustav Fischer, Jena.
City of Casey (2002a) C21 strategy: a vision
for Casey’s future [WWW document].
URL http://www.casey.vic.gov.au/c21/
(accessed 19 September 2005).
City of Casey (2002b) Business development
strategy 2002–2005 [WWW document].
URL http://www.casey.vic.gov.au/
policiesstrategies/article.asp?item=414
(accessed 20 April 2005).
City of Casey (2005) Business attraction
policy [WWW document]. URL http://
www.casey.vic.gov.au/policiesstrategies/
article.asp?Item=5402&SEARCH_STR=
jbusiness%20attraction%20policy
(accessed 12 January 2006).
Cooke, P. (2001) Regional innovation
systems, clusters, and the knowledge
economy. Industrial and Corporate
Change 10.4, 945–74.
Cooke, P., P. Boekholt and F. Todtling (2000)
The governance of innovation in Europe.
Pinter, London.
Cooke, P., M. Heidenreich and H.J. Braczyk
(2004) Regional systems innovation: the
role of governance in a globalized world.
Second edition, Routledge, London.
Dalziel, M. (2006) The impact of industry
associations. Innovation: Management,
Policy and Practice 8.3, 296–301.
de Laurentis, C. (2006) Regional innovation
systems and the labour market: a
comparison of five regions. European
Planning Studies 14.8, 1059–84.
Degryse, H. and S. Ongena (2005) Distance
lending relationships and competition.
Journal of Finance LX.1, 231–66.
Department of Infrastructure (2002)
Melbourne 2030: planning for sustainable
growth. Department of Infrastructure, State
Government of Victoria, Melbourne.
European Commission (1995) Green paper
on innovation. European Commission,
Brussels.
International Journal of Urban and Regional Research 33.3
© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
823
Felbinger, C.L. and J.E. Robey (2001)
Globalization’s impact on local policy: the
rise of regional cluster-based economic
development strategies. Policy Studies
Review 18.3, 63–79.
Field, J. (2003) Social capital. Routledge,
London.
Fisher, D.K., R. Kent, L. Nottingham and
J.R.B. Field (2005) Characteristics of
effective leaders in economic development:
an exploratory study. Southern Business
Review 31.1, 13–27.
Florida, R. (2002) The rise of the creative
class and how it’s transforming work,
leisure, community and everyday life.
Basic Books, New York.
Forsyth, A. (1999) Constructing suburbs:
competing voices in a debate over urban
growth. Gordon and Breach Publishers,
Amsterdam.
Frost, L. and T. Dingle (1995) Sustaining
suburbia: an historical perspective on
Australia’s urban growth. In P.N. Troy
(ed.), Australian cities: issues, strategies
and policies for urban Australia in the
1990s, Cambridge University Press,
Cambridge.
Fung, M.K.Y., W.-M. Ho and L. Zhu (1999)
Effects of government policy changes on
the private sector development in a
transitional economy: a long run analysis.
Journal of Economic Development 24.2,
19–41.
Garlick, S. (1998) Creative associations in
special places: enhancing the partnership
role of universities in building competitive
regional economies. Department of
Employment, Training and Youth Affairs,
Commonwealth of Australia, Southern
Cross Regional Research Institute,
Southern Cross University, New South
Wales.
Gunasekara, C. (2006) Universities and
associative regional governance: Australian
evidence in non-core metropolitan regions.
Regional Studies 40.7, 727–41.
Healy, E. and K. O’Connor (2001) Jobs and
housing location in Melbourne,
1986–1996: new insights into metropolitan
development. Australian Planner 38.1,
9–15.
Heidenreich, M. and G. Krauss (2004) The
Baden-Württemberg production and
innovation regime: past successes and new
challenges. In P. Cooke, M. Heidenreich
and H.J. Braczyk (eds.), Regional systems
innovation: the role of governance in a
824
globalized world, second edition,
Routledge, London.
Hettne, B. (1983) The development of
development theory. Acta Sociologica
26.3, 247–66.
Hettne, B. (1995) Introduction: towards an
international political economy of
development. European Journal of
Development Research 2.7, 223–32.
Hitech Marketing Services Pty Ltd (1998)
Research on home-based businesses in the
south eastern region, south east
development. City of Casey.
Hodge, S. (1996) Disadvantage and otherness
in Western Sydney. Australian Geographic
Studies 43.1, 32–44.
Hotelling, H. (1929) Stability and
competition. Economic Journal 39.1,
41–57.
Kaufman, H.F. (1975) Community
influentials: power figures or leaders? In
R.L. Warren (ed.), New perspectives on the
American community: a book of readings,
Third edition, Rand McNally College
Publishing Co., Chicago, IL.
Keller, W. (1996) Absorptive capacity: on the
creation and acquisition of technology in
development. Journal of Development
Economics 49.1, 199–207.
Kobayashi-Hillary, M. (2006) Outsourcing to
India: the offshore advantage. Springer,
New York.
Linder, J.C. (2006a) Does innovation drive
profitable growth? New metrics for a
complete picture. Journal of Business
Strategy 27.5, 38–44.
Linder, J.C. (2006b) Measuring profitable
growth and innovation [WWW document].
URL http://www.accenture.com/Global/
Research_and_Insights/Institute_For_
High_Performance_Business/By_
Publication_Type/Research_Notes/
MeasuringInnovation.htm (accessed 11
December 2006).
Lundvall, B. (1994) The global
unemployment problem and national
systems of innovation. In D. O’Doherty
(ed.), Globalization, networking and small
firm innovation, Pinter, London.
Maher, C. (1997) Locational disadvantage
and concentrations: a review and
evaluation of findings. In K. O’Connor
(ed.), Houses and jobs in cities and
regions, University of Queensland Press,
Brisbane.
Malecki, E.J. (1997) Technology and
economic development: the dynamics of
International Journal of Urban and Regional Research 33.3
© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
Debate
local and regional economic change.
Addison Wesley Longman, London.
Malthus, T.R. (1798) An essay on the
principle of population as it affects the
future improvements of society with
remarks on the speculations of Mr.
Godwin, M. Condorcet, and other writers.
J. Johnson, London.
Marshall, A. (1890) Principles of economics.
Macmillan, Basingstoke.
Massey, D. (1994) Space, place and gender.
University of Minnesota Press,
Minneapolis, MN.
Maude, A. (2004) Regional development
processes and policies in Australia: a
review of research 1990–2002. European
Planning Studies 12.1, 1–26.
Mazur, A. (1994) How does population
growth contribute to rising energy
consumption in America? Population and
Environment 15.5, 371–78.
McDougall, A. and K. O’Connor (2005) The
importance of proximity in economic
competitiveness: rethinking the role of
clusters in local economic development
policy. Australasian Journal of Regional
Studies 11.1, 3–24.
Molotch, H. (1976) The city as a growth
machine: towards a political economy of
place. American Journal of Sociology
82.2, 309–30.
Myrdal, G. (1957) Economic theory and
underdeveloped regions. Harper Row,
New York.
National Bureau of Economic Research
(2006) Does population aging affect
financial markets? [WWW document].
URL http://www.nber.org/aginghealth/
winter05/w10851.html (accessed 11
December 2006).
Nurkse, R. (1971) The theory of
underdevelopment and the idea of
balanced growth. In B. Mountjoy (ed.),
Developing the underdeveloped countries,
Macmillan, London.
O’Connor, K. and R.J. Stimson (1995) The
economic role of cities: economic change
and city development Australia
1971–1991. Urban Futures Research
Programme, Commonwealth Department
of Housing and Regional Development,
Australian Government Publishing Service,
Canberra.
O’Connor, K., R.J. Stimson and M. Daly
(2001) Australia’s changing economic
geography: a society dividing. Oxford
University Press, South Melbourne.
Debates and Developments
Organization for Economic Cooperation and
Development (OECD) (2006) Investment
for development: investment policy
co-operation with non-OECD economies
[WWW document]. URL http://www.oecd.
org/dataoecd/4/39/37576311.pdf (accessed
13 January 2007).
Onge, J.S., L.M. Hunter and J.D. Boardman
(2006) Population growth in high-amenity
rural areas: does it bring socioeconomic
status benefits for long-term residents?
Institute of Behavioural Science,
University of Colorado at Boulder,
Boulder, CO.
Osborne, E. (2000) Economic policy and
economic growth [WWW document]. URL
http://www.wright.edu/osborne~eosborne/
research/paper.postiaes.doc (accessed 14
June 2007).
Osborne, E. (2003) Economic policy and
economic growth. ISER Discussion Paper
No. 553. URL http://www.wright.edu/
osborne~eosborne/research/paper.
postiaes.doc (accessed 14 June 2007).
Otatti, G.D. (2004) The remarkable resilience
of the industrial districts of Tuscany. In P.
Cooke, M. Heidenreich and H.J. Braczyk
(eds.), Regional systems innovation:
the role of governance in a globalized
world, Second edition, Routledge,
London.
Outer Suburban/Interface Services and
Development Committee (2006) Building
new communities. Parliament of Victoria,
Melbourne.
Outer Suburban/Interface Services and
Development Committee (2008) Local
economic development in outer suburban
Melbourne. Parliament of Victoria,
Melbourne.
Perroux, F. (1955) Note sur la notion de pole
de croissance. Economie Appliquée 7.1–2,
307–20.
Porter, M.E. (1990) The competitive
advantage of nations. Free Press,
New York.
Reich, R. (1991) The work of nations:
preparing ourselves for 21st century
capitalism. Vintage, Colchester.
Romer, M.P. (1986) Increasing returns and
long run growth. Journal of Political
Economy 94.5, 1002–37.
International Journal of Urban and Regional Research 33.3
© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.
825
Saxenian, A. (1985) The genesis of Silicon
Valley. In A. Markusen and P. Hall (eds.),
Silicon landscapes, Allen and Unwin,
Boston, MA.
Schumpeter, J.A. (1939) Business cycles: a
theoretical, historical and statistical
analysis of the capitalist process. McGraw
Hill, New York.
Schumpeter, J.A. (1942) Capitalism,
socialism and democracy. McGraw Hill,
New York.
Sen, A.K. (1999) Development as freedom.
Oxford University Press, Oxford.
Simon, J.L. (1989) On aggregate empirical
studies relating population variables to
economic development. Population and
Development Review 15.2, 323–32.
Stimson, R.J., F.A. Shuaib and K.B.
O’Connor (1998) Population and
employment in Australia: regional hot
spots and cold spots, 1986 to 1996.
University of Queensland Press for The
Australian Housing and Urban Research
Institute, Brisbane.
Stimson, R.J., R.R. Stough and B.H. Roberts
(2006) Regional economic development:
analysis and planning strategy. Second
edition, Springer, New York.
Tichenor, D.J. (2002) Dividing lines: the
politics of immigration control in America.
Princeton University Press, Princeton, NJ.
Ughetto, E. (2006) Industrial districts and
financial constraints to innovation [WWW
document]. URL http://ssrn.com/
abstract=948413 (accessed 2 February
2007).
United Nations General Assembly (2006)
International migration and development,
report of the secretary general. United
Nations, New York.
von Thünen, J.H. (1966) Isolated state: an
English edition of Der isolierte Staat
in Beziehung auf Landwirtschaft und
Nationaloekonomie. Translated by C.M.
Wartenberg. Pergamon Press, Oxford.
Walzer, N. and B.D. Jacobs (1998)
Public–private partnerships for local
economic development. Greenwood
Publishing Group, Portsmouth, NH.
Weber, A. (1909) Theory of the location of
industries [English translation 1929].
University of Chicago Press, Chicago, IL.
826 Debate

Résumé
Économistes, géographes, urbanistes et autres spécialistes ont largement étudié le
mécanisme de développement économique urbain et régional infranational. Les très
nombreuses théories existantes sur le développement économique régional sont
insuffisantes à elles seules pour expliquer comment une région peut se développer et
prospérer. Chaque théorie a évalué quelques facettes de cette évolution. Les études
résultant de ces différentes perspectives ont un champ étroit et empêchent tout
enrichissement mutuel des recherches émanant de ces diverses théories. Prenant en
compte les facteurs multiples qui affectent le processus de développement, l’auteur a pu
créer un modèle intégré de développement économique urbain et régional. Le texte
commence par décrire et expliciter ce modèle intégré. Chacune de ses composantes
repose en grande partie sur les travaux majeurs dans le domaine. Le modèle propose
trois cercles. Chaque cercle se situe à un niveau d’abstraction différent. Les
déterminants du développement présentés dans chaque cercle peuvent influencer tout ou
partie des autres déterminants du développement appartenant à la structure d’ensemble.
Le modèle admet que le développement dans un centre quelconque, qu’il soit régional ou
urbain, naissant ou établi, est un aboutissement composite des interactions complexes de
tous les déterminants du développement. Est ensuite montré comment ce modèle peut
apporter une approche holistique élargie du développement économique régional,
capable d’aider les chercheurs à comprendre et relier les diverses théories sur cette
évolution.

International Journal of Urban and Regional Research 33.3

© 2009 The Author. Journal Compilation © 2009 Joint Editors and Blackwell Publishing Ltd.