innovation and territorial development: what is left for rural areas?

Innovation & Territorial Development: What is Left for Rural Areas?

Francesco Molinari, mail@francescomolinari.it

Francesco Molinari 2

In brief• 70% of global population will (by 2050) congregate in

Cities, but another 30% will forever stay out of the urbanisation process – that makes billion of people, not necessarily passive receptors of socially oriented services, but an immense reservoir of culture, resources – and innovation

• What patterns of evolution shall we foresee for these people / areas? Recently, smartness and specialisation have appeared (jointly or independently) as driving forces, which will be the topic of my speech today

• This poses new challenges to policy makers in EU peripheral regions

28-06-2013http://www.who.int/gho/urban_health/situation_trends/urban_population_growth_text/en/

Francesco Molinari 328-06-2013

http://smartness.it/?page_id=38

Smartness = An Ecosystemic concept

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Could these functions bepart of rural world too?

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http://www.nus.edu.sg/globalasiainstitute/events/speakerseries/downloads/ProfViswanadham_Design_of_Smart_Villages.pdf

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Could these functions bepart of rural world too?

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A positive answer in http://www.peripheria.eu/places/palmela

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Could these functions bepart of rural world too?

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The best, quickest and most efficient way is to build up from the bottom. Every village has to become a self sufficient republic. This does not require brave resolutions. It requires brave, corporate, intelligent work.

(Gandhiji, Harijan, 18-1-1922)

Quoted from http://www.nus.edu.sg/globalasiainstitute/events/speakerseries/downloads/ProfViswanadham_Design_of_Smart_Villages.pdf

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SpecialisationDavid Ricardo, 1817:

In Portugal it is possible to produce both wine and cloth with less labour than it would take to produce the same quantities in England. However the relative costs of producing those two goods are different in the two countries. In England it is very hard to produce wine, and only moderately difficult to produce cloth. In Portugal both are easy to produce. Therefore, while it is cheaper to produce cloth in Portugal than England, it is cheaper still for Portugal to produce excess wine, and trade that for English cloth. Conversely England benefits from this trade because its cost for producing cloth has not changed but it can now get wine at a lower price, closer to the cost of cloth. The conclusion drawn is that each country can gain by specializing in the good where it has comparative advantage, and trading that good for the other.

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http://en.wikipedia.org/wiki/Comparative_advantage

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But the world has changed meanwhile

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Smart Specialisation

• Shift from a mainly sectorial to a territorial discourse (“place matters”)

• Key concepts (after Philip Mc Cann):– Embeddedness: what belongs to the place, to the

community (of affairs, of citizens, etc.)– Related variety: specialised technological

diversification (comparative, rather than competitive advantage)

– Connectivity: i.e. access to markets, global value chains, etc.

28-06-2013http://ec.europa.eu/regional_policy/cooperate/regions_for_economic_change/index_en.cfm

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Innovation

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International cooperation is conducive to all kinds of

innovation…

…BUTregional / national

cooperation has little or no effect,

esp. on DUL

ALL types of

interaction matter…

CONCLUSIONS:

1) Excessive territorial proximity may be detrimental to innovation

2) Heterogeneity of industrial agents is important

…BUT cooperation with competitors can significantly

harm entrepreneurial capacity to innovate

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Morale

• Smart Specialisation Strategy design is a big opportunity for EU rural communities (regions)

• Its most immediate implications are towards promoting the generation, exploitation, and dissemination of local ideas and knowledge

• Maximising both intra- and inter-regional knowledge spillovers in the relevant scale domains

• In this context, “Laissez-faire” leads to underprovision of innovation and governments need to play a dual role in fostering industrial growth and transformation (R. Hausmann & D. Rodrik, Economic Development as Self-Discovery, 2003)

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Thanks!

• See you in person next time!• mail@francescomolinari.it

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