Competitiveness and the knowledge economy - where do we stand?

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Competitiveness and the knowledge economy - where
do we stand?

• Prof David Charles
• University of Newcastle upon Tyne

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Knowledge and the Economy

• Knowledge (as human capital) is increasing in
  importance as a factor of production
• Output and employment growth globally is fastest
  in knowledge intensive sectors
• Investment in knowledge creation and formal
  learning are increasing (over 17 of GDP in some
  cases)
• Skilled and knowledge workers are in increasing
  demand
• Core regions are massively specialised in
  knowledge intensive activities

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External Drivers for Change

• Combination of three main processes
• Globalisation will continue to weaken demand for
  low skilled workers in all OECD countries
• Technological change will reduce demand for
  traditional and low skilled jobs
• Shift to new flexible firm organisation requires
  a more autonomous, creative, cosmopolitan and
  ultimately more self-reliant workforce
• Demand for unskilled workers will continue to
  fall, growth in demand for personal services will
  only increase in the context of wealth creation

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• What is needed for a city or region to be
  creative, economically successful and have a good
  quality of life in a post industrial and highly
  globalised world?

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Competitiveness and city-region challenges

• Key interlinked urban development processes and
  policy arenas underpinning competitiveness
• Knowledge and economic competitiveness
• Cosmopolitanism and image
• Reducing social polarisation
• Environmental sustainability
• Effective governance

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Knowledge and city competitiveness

• A central role for cities in the knowledge
  economy
• Virtuous cycles of knowledge creation and
  application
• Innovation and creativity
• Knowledge as a strategic resource
• Place specific tacit knowledge and localisation
• Knowledge clusters and cluster knowledge
• Emergence of new geographies of services
• Building strengths in RD and HE to underpin
  clusters

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Cosmopolitanism culture and image

• The city as crossroad and place of interchange of
  ideas
• Fashion, diversity, hybridisation, innovation,
  creativity
• Combination of social classes and ethnic groups
• Elite culture and innovation in popular culture
• Stimulus to innovation in new forms of work and
  services
• Cultural strategies
• Realisation of role as a production base
• Re-branding the city - diversity and tensions
• Ripples and spillovers - diffusion of ideas

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Creativity talent, technology and tolerance

• Cluster success requires and encourages flow of
  talented individuals
• Especially important in new economy, multimedia,
  creative industries etc
• Work in the US on the geography of talent focuses
  on role of urban amenities
• Association between creative employment and open,
  vibrant communities
• Interactions among the three Ts technology
  talent and tolerance

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Criticisms of the Florida thesis

• Directions of causality
• Assumptions about ease of migration
• Innovation associated with both shared beliefs
  and with difference
• But there are important points to consider
• Argument concerning US advantage in talent
  attraction in the past - Other places now
  catching up
• International student market and retention of
  PhDs
• Global mobility of engineers Finland and
  Bangalore

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Growth of services
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Implications for the regions

• Regional competitiveness is being defined by
  success in high GVA knowledge based services
• This is dependent on growing levels of graduate
  skills
• UK productivity as a whole depends on raising the
  performance of the regions
• How can regional skills partnerships support a
  knowledge based regional economic strategy?

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The graduate labour market process
New migrants
Students from elsewhere
Non-local graduates
Students domiciled in the region
Regional HEIs
Regional employers
Local graduates
Local and non-local graduates
Employers in other regions
Students studying in other regions
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Key questions

• How should regional partners intervene in
  graduate labour markets?
• What kinds of skills policies can help to develop
  new high value added industries?
• How does the regional skills strategy link
  together lower level and high level skills
  development?

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An aside on learning regions (and cities)

• Innovation systems or training strategies?
• Both are very partial readings of learning and
  the extent to which it is characteristic of place
• Individualised and social forms of learning
• We need to be promoting learning within policy
  arenas as well as for individuals and amongst
  organisations of all kinds