Competitive regionalism and the territorial governance of uncertainty

Introduction

Since the beginning of the 1990s many social scientists have devoted increasing attention to the topic of regional development in European countries, trying to understand the local foundation of economic competitiveness and to identify the causes of disparities and persisting inequalities across regions. This has been reinforced by the fast-growing process of political devolution in many EU countries, which has increased the importance of local-level regulation for many issues related to economic and labour market policies. In this context, economists, geographers, sociologists and political scientists have identified many factors that help explain differences in economic development, such as physical infrastructure, a skilled workforce, geographical location, the existence of large-scale leader firms and a well-functioning network for the exchange of knowledge between universities and firms.

Despite globalization, firms are increasingly dependent on goods and services produced locally, and local and regional stakeholders are crucial. For example, many analyses of Italian industrial districts underline the importance of social capital in promoting cooperation among actors (Trigilia, 2001; Dei Ottati, 2009; Trigilia and Burroni, 2009; Becattini et al., 2009). The competitiveness of industrial districts is favoured by their embeddedness in a network of small cities with a peculiar mixture of modern and traditional components, and a high level of social integration. This has helped to build a network of trust and patterns of social relations important for the growth of small firms. Industrial relations have developed on a cooperative and localist model, based on territorial agreements that do not hinder flexibility but promote economic innovation. Local governments, in turn, have provided economic services and infrastructure (industrial areas, training and other services for firms) for local firms.

At the same time, research on high-tech clusters emphasizes the importance of cooperation between local governments, universities and firms in accordance with a model referred to as a triple helix (Etzkowitz, 2008). Cooperation among local stakeholders favours the establishment of institutions devoted to technological transfer, the creation of effective incubators for high-tech firms, policies that promote a highly skilled workforce and the provision of well-targeted business services (Lawton Smith, 2006; Novarina, 2010; Crescenzi and Rodríguez-Pose, 2011; Biagiotti and Burroni, 2004; Burroni and Trigilia, 2011; Crouch et al., 2001, 2004). This set of local collective resources favours the reinforcement of networks of small and medium-sized enterprises (SMEs), on the one hand, and the competitiveness of large-scale firms specialized in high-tech sectors, on the other. This helps to attract FDI. At the same time, the efforts of local government to increase the quality of life at local level and to offer a wide range of public services attract highly skilled actors specializing in the so-called knowledge economy (Florida, 2005). This strand of research emphasizes that this complex and intertwined network of policies and inter-institutional relations that characterizes many successful clusters in high-technology activities all around Europe is able to foster economic innovation and local development.

A third strand of research underlines the importance of inter-institutional cooperation also in multi-specialized local systems, such as metropolitan areas (Scott, 2008; Storper, 2013; DiGaetano and Strom, 2003; Couch et al., 2003; Le Galès, 2002; Savitch and Kantor, 2002; Moualert et al., 2003). In recent years, many large European cities have experimented with forms of collective regulation based on tripartite negotiation or on forms of deliberative democracy to promote the revitalization of the economy. Local stakeholders in cities of various sizes influence the provision of collective resources, infrastructure, research centres and business services with the aim of reinforcing a city’s competitiveness and attracting FDI. Even though there are many varieties of development path, particular importance is attached to high-tech activities, innovation and sustainability, as well as to tourism.

There are two main themes in this literature. First, local policy-making has a high degree of inclusion: local policies are the result of a process of decision-making and policy implementation that is open to many local stakeholders, favouring the participation of ‘new actors’ such as quangos, organizations representing civil society, the voluntary sector, environmental movements and citizens’ groups. Many policy instruments are adopted to favour these processes, such as forums, deliberative meetings, open assemblies and citizens’ juries. In this context, the role of collective actors is increasing and the mechanism of public-private partnership is becoming one of the dominant tools of local governance.

The second theme is the importance of ‘place-based’ policies to create local collective competition goods (LCCGs), namely collective attempts to supply integrated goods and services tailored to local contexts and firms (Barca, 2009; Crouch et al., 2001, 2004; Regalia, 2006). In other words, local stakeholders try to produce a rich tissue of external economies for local small and large firms, such as skills provision, R&D facilities and information about new markets. These LCCGs can be tangible (such as industrial zones, science parks and communication infrastructure) or intangible (skills, knowledge transfer, services aimed at promoting entrepreneurship, and research and development), and many aim at attracting external firms and direct investments, as well as promoting the competitiveness of local firms.

The research summarized in this article focuses on these issues in three case studies: Birmingham, Lyon and Turin. ¹ We shall consider who plays a role in local regulatory mechanisms and the outcomes for political economy (Hollingsworth et al., 2002; Crouch, 2005). All three cases present examples of competitive regionalism (Barca, 2009). This model shares some features underlined by the above-mentioned scholars, but the three case studies raise some issues less emphasized in the existing literature: the importance of the green economy, the key role played by three actors (local government, development agencies and organizations representing civil society) and, in particular, the impact of the crisis on this model of local governance.

The article is organized as follows: first, I shall deal with the identification of commonalities among the three cases of competitive regionalism in term of actors and political economy (Sections 2 and 3). Secondly, I will consider the impact of the crisis on the competitive regionalism model (Section 4). Thirdly, in Section 5, I will summarize the main results of the research. Finally, I will present some hypotheses on the implications of the main features of competitive regionalism for the actions and strategies of collective actors.

The key actors of competitive regionalism

A comparison of the three cities shows that three actors play a relevant role in local governance: local government, development agencies and civil society. Unions and employers’ associations participate in some local policy-making, but their importance could increase if they adopted a strategy of interest representation that combines the company level with the territorial one.

In recent years many contributions have claimed to perceive a decline in the role of the state, suggesting a form of ‘governance without government’ (Peters and Pierre, 1998; Börzel and Risse, 2010). Recent research has not fully confirmed this. As Patrick Le Galès has emphasized, ‘governance has not replaced government. Political actors have particular resources for directing the behaviour of actors and networks, for arbitrating between different networks, and for legitimizing their choice’ (Le Galès, 2002: 17). Our case studies confirm that local government plays an important role in local governance, in two main ways. First, it initiated a path of exit from the crisis, mobilized other local actors, favoured their participation and has emphasized the need for new local development plans. ² Secondly, local government is the main promoter of experiments in cooperation with the private sector, as well as with other public institutions in order to achieve the ‘critical mass’ needed to create local public goods or projects with a significant impact on local society.

A second important actor in the governance model of competitive regionalism is the regional development agencies. ³ These play a major role in all three cases studies, especially in implementing policies and in offering services to firms and the local community. These organizations are defined as ‘regionally based, publicly financed institutions outside the mainstream of central and local government administration designed to promote economic development’ (Halkier et al., 1998; Halkier, 2011): they have strong technical legitimacy and are created through national or regional policies. Sometimes they are created for the management and implementation of European projects; in other cases they result from cooperation among local actors. In most cases, they do not have any direct democratic legitimacy, since their members are not elected. In the large majority of cases, they include private and public actors in the form of public-private partnerships.

Finally, efforts to set up an inclusive model of policy-making led to an increasing role for actors and organizations that had in the past been excluded from local policy-making, in particular, organizations representing civil society. At the same time, the importance of unions in local governance seems still marginal, especially in France and in the United Kingdom, although they continue to play a role in Italy, where there is a longstanding tradition of involvement in territorial trilateral negotiation.

The role of all these actors emerged clearly from many of the interviews carried out with the major local stakeholders in the three cases. In order to understand whether their positions can be empirically confirmed by an analysis of their participation in local governance it is useful to focus on some of the most important local plans and measures in the three cities.

Birmingham is a good example. In 2003 Birmingham City Council set up the Enterprising Communities Action Plan, a £22.6m programme of activities that was delivered over an eight-year period to support existing enterprises and to develop a ‘business case’ for local services for firms, at the same time offering services to the local economy and community to reduce unemployment and to foster social cohesion. Moreover, the Council, together with Birmingham Chamber of Commerce and Industry and with the Birmingham and Solihull Learning and Skills Council, set up the comprehensive plan Developing Birmingham – an Economic Strategy for the City 2005–2015, which identified policies for five key topics: investments, skilled workforce, diversification, entrepreneurship and a vibrant city. The Council also defined the sectoral strategy of the plan Making Things Happen – a Strategy for Manufacturing in Birmingham 2006–2015, in which policy measures to promote the competitiveness of manufacturing activities were identified. The more recent strategy for growth that adopted a wide territorial scale to promote the city – the Greater Birmingham Project: The Path To Local Growth – is promoted by the local government together with Greater Birmingham and Solihull Local Enterprise Partnership. The strategy proposes a ‘Supervisory Board’ composed of the nine elected local authority leaders that would provide clear political accountability for the management of funds and projects. Birmingham City Council also launched a Business Loan Fund in January 2010, an initiative that offered a £10m package of loans to small and medium-sized enterprises (SMEs) based in Birmingham; and in June 2011 the Council launched a £10m Equity Fund, which is open to local companies that can demonstrate a two-year trading record.

The United Kingdom is also a good example of the activism of development agencies. In recent years nine regional development agencies acquired important competencies in economic development, regeneration, employment promotion, skills and sustainable development, and they played an important role in many parts of the country before being abolished in 2010. Among them, the regional development agency Advantage West Midlands had an important impact on the Birmingham area through many measures related to socio-economic development. Even if regional development agencies have been abolished, other agencies are playing an important role, such as BeBirmingham, established in 2001, that coordinated and delivered the Local Area Agreement, the three-year agreement between the city and central government. BeBirmingham also coordinates the project Birmingham 2026 that introduced measures to promote economic growth and sustainable development through a low carbon economy.

Finally, inclusive policies have fostered the participation of ‘new actors’ in the Birmingham model of local governance. In the prospectus ‘Big City – Big Society’, local actors underline the importance of the involvement of various civic and voluntary associations in establishing services.

The role of municipal government also emerges clearly in Lyon. The local government of Lyon together with 57 other local municipalities in the area has promoted, managed and monitored two local plans since the mid-1990s: the Scot-Schéma de Cohérence Territoriale and the Projet d’aménagement et de développement durable. These plans are part of the strategic planning of the city that is widely considered one of the most durable examples of good practice in deliberative planning in Europe. It also supports five Pôles de Compétitivités with a series of services and policies, including the monitoring of Pôle projects. Finally, Grand Lyon is the promoter of Grand Lyon Esprit d’Enterprise, a partnership with the local chamber of commerce, MEDEF (Union of Employers of Lyon), the CGPME (confederation of small scale firms) and the University of Lyon, created in 1997 with the aim of reinforcing and coordinating the actions of its major stakeholders on all issues related to local development.

As for local development agencies, Aderly (Agence pour le Développement Economique de la Région Lyonnaise) was one of the first local development agencies to be created in France (1974). It identifies and provides support for projects involving investments and the establishment of new companies and national or international public organizations in the Lyon region. Aderly has 60 public and private sector members: the two most important are the local chamber of commerce and Grand Lyon that finance, respectively, 40 per cent and 33 per cent of the agency’s budget. Its main aim is to welcome and support companies and to help the people in charge of local business projects to achieve positive results in the Lyon region. It is organized with four business units, each related to the topic of local development (life sciences; cleantech industry; services activities; projects and territorial development). Aderly supports investment by non-local firms: in 2012 it provided consultancy and assistance to 71 medium-sized and large firms that invested in the Lyon area, most of them in the form of FDI.

Attempts to increase the participation of new actors in local governance are a longstanding tradition in Lyon: an experiment in strategic planning started about 25 years ago with the reorganization of the Schéma directeur d’aménagement et d’urbanisme (Sdau). This led to the local strategic plan for development called ‘Lyon 2010’, representing a radical break with the previous practice of traditional and technocratic planning based on the regulation of land use. The plan promoted major participation on the part of civil society via a forum and other tools of deliberative planning. The aim of favouring the participation of local society was reinforced with the establishment of two formal organizations since 2000. The first is the Conseil de développement, with 260 members, appointed to represent a large group of associations and organizations that play a role in the Lyon area. The second is the Commission consultative des services publics locaux, created in 2003 following the law on so-called ‘démocratie de proximité’. Its members include elected representatives (25 per cent of total membership) and members of more than 30 various local associations covering a wide range of issues, from the handicapped to nature conservation. Other participative commissions play a role for specific local groups, such as the Commission Intercommunale d’Accessibilité or the Conférence d'agglomération de l'habitat.

In Italy, the municipality of Turin has promoted two strategic plans and has played a very important role in promoting the economic diversification of the area. For example, in order to help the city to recover from the economic crisis that affected FIAT – the most important company in the city – in 2002 the municipality participated with the Regione Piemonte, Provincia di Torino and FIAT in Torino Nuova Economia (TNE). This bought a large part of Mirafiori, the historical FIAT plant (the biggest in Italy) and has managed the restructuring of the area with a total investment of €25m. This process led to about 300 000 square metres of area being given back to the urban fabric and part of this area is hosting the new technological hub (Polo Tecnologico Mirafiori). This will lead to the expansion of a Design Centre and the creation of a centre for services for people and businesses, which will also host commercial activities, university residences, exhibition centres, advanced services and business incubators. The local government has also played an important ‘proactive’ role in the economic diversification of the area, promoting activities related to ICT. Finally, the local government has established services to cope with the economic crisis: for example, the wage guarantee fund – Cassa Integrazione Guadagni – is aimed at protecting workers’ incomes in case of restructuring or closure of firms and is usually managed by the Italian National Institute of Social Insurance (INPS). The administrative procedures of the INPS require around six months’ completion time. The city government therefore reached an agreement with the INPS and with local banks to make advance payments of around €600 per worker for 12 months.

Development agencies also play a role in Turin. For example, Torino Internazionale – now Torino Strategica – manages strategic planning. With its first plan (1998–2004) it promoted a radical reorganization of local governance in the area, favouring the participation of local society and promoting the economic diversification of the local economy. This continued with the second plan (2006–2010) and the more recent phase of strategic planning called ‘Torino Strategica’. A second example is Torino Wireless, a development agency founded by a partnership between public institutions, the chamber of commerce of Turin, large firms, banks, universities and research centres and the association of industrial firms of Turin. It is organized around five areas of activity – support for innovation, analysis of strengths and weaknesses, consultancies on opportunities from public funds, networking and venture capital – and it is the management body of the Innovation Pole of Turin, which gathers together firms, research centres and institutions in ICT. A third example is the Mario Boella Institute, founded in 2000 with an initial investment of €4m. This is a partnership between Compagnia di San Paolo and the Politecnico University, and specializes in research activities and technology transfer; it covers a wide range of topics and projects in many high-tech fields.

Finally, concerning the participation of local stakeholders, there has been a shift from a ‘polarized network’ organized around a few local actors to a ‘policentric network’ that since the mid-1990s has included a rising number of actors in the making of strategic decisions (Locke, 1995; Barbera and Pacetti, 2008). Torino Strategica, the association in charge of managing the recent steps taken by the strategic plan, is a good example of this involvement.

Summing up, the case studies show that three actors are playing a leading role in local economic governance. The first is local government, confirming the importance of local politics in elaborating plans, creating services, contributing to the mobilization of other local stakeholders and promoting direct investments. Second are regional development agencies, technical organizations aimed at producing LCCGs and at coordinating plans for development. Third, actors representing civil society are gaining importance.

Interviews underline that the role of these three actors, especially agencies and civil society, has been increasing in recent years. This is also confirmed by the emergence of new forms of planning created at the end of the 1990s, such as strategic planning in Italy or the Big Society in the United Kingdom. In our case studies, new forms of participation and local development agencies have been created recently in Birmingham (BeBirmingham or the prospectus ‘Big City – Big Society’), Turin (Torino Strategica, Torino Internazionale, Torino Nuova Economia, the process of strategic planning) and Lyon (Glee, Conseil de développement, Commission consultative des services publics locaux). This recent mobilization to build new organizations and to promote the rise of deliberative mechanisms confirms that the importance of these actors has been growing in recent years.

In this context, more formally organized interests, such as unions, play a role in some policy tools, but in general they seem to be less involved than others, especially in the United Kingdom and France. This is probably because unions in these two countries are organized mainly at company level rather than territorially. However, the trends towards inclusion in policy-making that characterize competitive regionalism offer new opportunities and political spaces for unions, if they could revive their local territorial capacities.

The political economy of competitive regionalism

Focusing on the political economy that characterizes the three case studies we can see two ‘families’ of commonalities (Streeck, 2010). The first is related to the method and institutional architecture of local political economy; the second concerns contents and measures.

With regard to the first theme, our research underlined that inclusive policy-making is one of the most important pillars of local governance in the three cities. This means that local actors use a wide range of mechanisms, such as forums, deliberative meetings and open assemblies. Also important is so-called place-based political economy, which means that cities try to promote their economy with plans and projects based on alliances among local actors, aimed at specific and well-targeted goals. These local coalitions may vary from one project to the other, even though the most important actors can be found in many of them. A very important common feature is an attempt to create territorial competitive advantages for the community of firms located in a given territory (Crouch et al., 2001, 2004). In contrast to traditional industrial and economic policies that created direct financial incentives for single firms, cities are more and more adopting an ‘area-based’ approach: firms that compete in the global economy are more dependent on the institutional environment in which they are located and for this reason local policies aim at producing a rich tissue of external economies, offering and creating services and goods, such as skills provision, R&D facilities and information on new markets.

As for the contents of local political economy, LCCGs are primarily addressed to firms and workers in core sectors. As we have already underlined, local actors define as ‘strategic’ activities related to the knowledge economy, such as information and communication technology, the creative and media industries and advanced manufacturing. Secondly, an emerging issue for local political economy is support for sustainability and the green economy (Christopherson, 2011). Here it is important to note a shift from the idea of environmental sustainability as a limit to growth to the idea of the green economy as a driver of local development: increasing attention in policy discourse has been dedicated to the idea of ‘green growth’, based on renewable energy, improved efficiency in the use of energy and materials and the development of ‘green jobs’ (OECD, 2010).

The Birmingham case is a good example of the above-mentioned trends. For example, regarding inclusion in policy-making, in 2008 a Statement of Community Involvement (SCI) was approved by the Birmingham City Council; the SCI identified how to encourage more people to participate in decision-making by creating minimum standards for consultation on new policies and planning. It established an intensive process based on multiple steps of public consultation (which includes specific consultation bodies, neighbourhood Forums, resident associations and voluntary associations) that comes up with binding recommendations for local policy-makers. At the same time, it is important to underline that at the end of 2011 Birmingham City Council launched the prospectus ‘Big City – Big Society’ to favour participation in policy-making participation by local society. The area-based approach can be found in many recent local development plans: the 2008–2011 Local Area Agreement, the 2011 Birmingham's Prospectus for the Big Society, the plan Developing Birmingham: An Economic Strategy for the City 2005–2015, or the plan Making Things Happen: A Strategy for Manufacturing in Birmingham 2006–2015, as well as the work carried out first by Advantage West Midlands and later by the Local Enterprise Partnership. These focus on the establishment of collective resources in various policy areas (skills, R&D, transport and communication, business consultancies). According to local stakeholders these policies are able to increase the availability of external economies and the area’s competitiveness (Barber and Hall, 2008). The attention to high-tech sectors emerges clearly from all local plans and actions to promote the competitiveness of the city. One of the main aims is to diversify the city’s economy, promoting it as a Science City and maximizing investments in new sectors: medical technologies, advanced materials, environmental technologies and creative and cultural industries, and the low-carbon economy. Moreover, the local development strategy for manufacturing activities is strongly rooted in the promotion of the sector via sectoral policy, such as building a high-quality infrastructure that meets the needs of advanced manufacturing or measures to promote entrepreneurship or the development of a highly skilled and adaptable workforce to encourage the combination of manufacturing and high-tech activities, encouraging greater use of innovation, technology and investment in R&D. Finally, support for the green economy is embodied in the Green New Deal – part of the action of the Local Enterprise Partnership – that is setting up energy efficiency mechanisms through new district energy schemes and renewable energy capture opportunities. To pursue these goals and to achieve energy efficiency it is necessary to establish major investments that will help – according to local actors – to improve business competitiveness and, importantly, create new jobs.

The four pillars – inclusion, place-based policies, support for ICT and promotion of the green economy – can also be found in Lyon. A large part of the measures promoted by Grand Lyon l’Esprit d’Enterprise, the local partnership that includes chambers of commerce, the Communautè Urbaine, Medef and the Confédération Générale des Petites et Moyennes Enterprise, or the actions of the agency for local development, Aderly, or the policies related to the five Pôles de Compétitivité active in Lyon, are explicitly targeted on reinforcing the competitiveness of the entire area of Grand Lyon, in accordance with what can be described as a place-based approach.

Examples of support for core sectors can also be found. Lyonbiopôle, Imaginove and Techtera, three Pôles de Compétitivité in the area, focus on high-tech activities: Lyonbiopôle offers services to firms specializing in the biomedical and medical sector, in research on cancer and diagnostic, and prevention (BioMériex, Sanofi Pasteur, Merial, BD France are important members of Lyonbiopôle); Imaginove promotes the media sector; while Techtera promotes and finances R&D projects aimed at increasing the high-tech input of textile-sector activities, such as research into new fabrics, the application of nanotechnologies to textiles and promotion of the multifunctionality of single types of fabric. At the same time, two of the main fields of activities of Aderly – the agency for local development in Lyon – are in life sciences and the green economy. Finally, the Communauté Urbaine is engaged in a policy effort to promote creative industries, such as design and the media. Sustainability and the green economy is a mainstreaming topic in all the above-mentioned initiatives and one of Aderly’s most important fields of action is ‘Cleantech’ specializing in green technologies. In this policy area, Grand Lyon offers services for start-up funding of projects and to reinforce inter-firm networks. In recent years Grand Lyon has set up two local Agenda 21s, with a series of proposals based on the concept of sustainable development, namely the promotion of local long-term socio-economic growth based on sustainable technology and development. Important local big projects – Carré de Soie, Lyon Confluence and Berge du Rhone – that are contributing to the restructuring of the metropolitan area share this connection between environmental sustainability and economic development.

An attempt to establish inclusive policy-making can also be found in Turin, where the process of strategic planning was based on the role of an association – Associazione Torino Internazionale – of 90 local organizations, including many not-for-profit bodies (Pinson, 2002). It promoted discussion forums, public meetings and other forms of individual participation according to a model of local policy, strongly influenced by a sort of deliberative democracy. Turin is also a good example of the production of goods and services on the basis of a territorially based approach: the two Strategic Plans of 1998 and 2006 had among their main aims diversification from a one-company city based on car producer FIAT to a polycentric city based on activities related to high technologies, innovation and advanced manufacturing. For example, since 2005 the Piedmont Region, the Province of Turin, the Chamber of Commerce of Turin, Finpiemonte, Unione Industriale Piemonte and API Turin have created the Comitato di Distretto Aerospaziale (technological district based on aerospace production) to promote this sector in the local area, helping to reinforce a cluster that is one of the most important in Italy (Burroni and Trigilia, 2011). An important effort to promote high-tech activities is also being made by the already-mentioned Fondazione Torino Wireless, which promotes the reinforcement of the ICT district, operating in the fields of energy, health care, mobility, banking, enterprise mobility, offering support to innovation, fund raising, networking activities and access to venture capital. At the same time, Torino Wireless is managing the Polo di Innovazione that links up large firms and SMEs with research centres, promoting company collaboration on innovative projects, analysing company needs in terms of specific innovation services and organizing networking activities. Finally, the Polo della Creatività Digitale e Multimedialità is a network promoted by the Regional Government and based in Turin that has 60 members, involving local firms, research centres and universities for the digital and media economy. The Environment Park created in 1996 by Regione Piemonte, Provincia di Torino, Comune di Torino and the EU is carrying out a series of activities related to environmental sustainability, such as green building, as well as projects for the evaluation of energy costs, the promotion of sustainable tourism and the environmental sustainability of textiles, mechanical engineering, packaging and the food industry.

A comparative analysis of political economy in the three cities shows that they share many similarities. Policies for the inclusion of a wide range of local stakeholders and place-based policies aimed at setting up local collective competition goods characterize the three case studies. At the same time, in all three cities the local political economy is devoted mainly to supporting specific sectors, in particular high-tech and advanced manufacturing. It is interesting to note that the green economy and so-called ‘green growth’ play an important role in this model; this shows how the topic of sustainability is influencing the action of local stakeholders. This is an interesting new field for further research that analyses how the green economy will influence the pillars of competitive regionalism in the coming years. This model of political economy emphasizes the role played by external economies and of territorial competitive advantages; market regulation plays an important role within this framework.

In recent years, the model of competitive regionalism has been challenged by the impact of the 2008 economic crisis that has affected the three countries in different ways. It is useful to focus on this impact to understand the most recent trends characterizing this model of local governance.

The impact of the 2008 crisis and its policy implications

Although it is still early to assess the long-term influence on local governance of the 2008 financial crisis there is no doubt that it is having a major impact on the three cities.

The 2008 financial crisis created notable challenges not only for the labour market but also for the governance model of competitive regionalism (Paulais, 2009; Council of European Municipalities and Regions, 2009; Martinez et al., 2009). First, it entailed a sharp decline in revenues generated by local governments or derived from state transfers; secondly, it created a shift in demand for local services, with an increase in demand for local passive policies (measures aimed at maintaining economic wealth and income support via insurance or transfers) related to the rise of unemployment, drawing resources away from more active policies; thirdly, there has been a rise in expenditure because of the slowdown in economic activity and the corresponding increases in demand on social security (Paulais, 2009). Thus, the crisis has recast local regulation in a context of declining resources. At the same time, the crisis has made it more difficult to promote local competition goods: the reduction of public resources makes it hard to achieve sufficient critical mass to create local competitive advantages. Finally, local organizations and firms have difficulty raising loans.

Even if it is too early to assess how local stakeholders are reacting to these problems, it is possible to identify some possible paths. Interviews with local actors underlined that the causes of the crisis are perceived as exogenous, related to the international regulation of financial markets, and for this reason the ‘essence’ of competitive regionalism is not questioned by local actors. There is a widespread view that local stakeholders should adopt a ‘let’s do more’ strategy: in times of crisis it is even more important to create the conditions for competitiveness. This confirms – and reinforces – three important constitutive features of competitive regionalism: (a) the importance of a ‘place-based’ agenda focused on economic growth and competitiveness; (b) the notable attention dedicated to cooperation, inclusive approaches, participatory decision-making and experiments with deliberative planning (‘let’s react to the crisis together’); (c) the focus on strategic sectors, with particular attention to high-tech activities. At the same time, local actors – especially the local government – have paid a lot of attention to the establishment of ‘passive’ measures, forms of local welfare to sustain vulnerable workers and social groups. Thus, there is a twofold focus of local policies during the crisis: on the one hand, they foster economic competitiveness and on the other they aim at reinforcing social cohesion, mitigating the impact of the crisis.

We have already mentioned many examples that show how in Birmingham after the crisis local actors tried to promote economic growth and competitiveness with support for strategic sectors. This is central to the 2013 plan Greater Birmingham Project: the Path to Local Growth (GBSLEP), where local stakeholders agreed a series of place-based measures and services related to skills and the labour market. At the same time, the GBSLEP has strongly supported life sciences and advanced manufacturing. Moreover, the Birmingham City Council together with six local strategic partnerships launched a £20m programme to support the green economy in 2013. Notable efforts for the inclusion of various local stakeholders can be found in the plan Big City – Big Society, which also identifies new needs in the field of welfare. The attention to welfare provision for vulnerable people has been emphasized by the actors participating in consultation on the White Paper Making Birmingham An Inclusive City. The local government also looked at a specific need produced by the crisis when it launched the already-mentioned Business Loan Fund to deal with the credit crunch for local firms. The same is true in Lyon, where consultation and inclusion characterize the recent experiences of local restructuring. In Lyon there is also a strong effort to promote high-tech activities and to create place-based goods and services: in 2013 Gran Lyon invested massively in the five Pôles de Compétitivité, three of them specializing in high-tech activities (life sciences, the media and new materials, such as nanotechnology for the textile industry) and Aderly offered targeted services to attract external firms. Hand in hand with these policies, local actors emphasized the role played by local welfare policies and the promotion of the green economy, such as in the already-mentioned case of the support of Aderly or Grand Lyon for the cleantech industry. The Turin case study confirms these trends: Torino Strategica has among its main pillars the inclusion of a growing part of local society, increasing the effectiveness of participation of the two previous strategic plans, via selective colloquia, discussion forums and public meetings. We have already underlined how in recent years Torino Wireless and other institutes and agencies, such as the Mario Boella Institute, have promoted high-tech activities, paying particular attention to sustainability and how the local government introduced measures of support to deal with unemployment, such as the wage guarantee fund.

Summarizing, the crisis endangered the competitiveness of the three cities and created some important constraints on the model of local governance. However, the crisis did not change the main features of competitive regionalism. It continues to be characterized by a place-based agenda to support economic development, an inclusive approach to policy-making and the role of local government and development agencies. The local political economy of competitive regionalism in times of crisis promotes the reinforcement of market regulation and support for core sectors (especially high-tech, advanced manufacturing and the green economy). This enlarges the room to manoeuvre for market regulation. At the same time, the crisis and rising unemployment have led to an increase in demand for local passive policies. For these reasons support for economic competitiveness is balanced by attention to local welfare measures aimed at mitigating the consequences of the crisis. From this point of view, the crisis has emphasized that the process of marketization and support for economic competitiveness in local policies in the three cities need clear and strong policy intervention able to produce local competition goods, on the one hand, and to reinforce social cohesion, on the other.

Conclusions

Analysis of the territorial governance of uncertainty shows many similarities among local governance modes in French, Italian and UK cities. These similarities can be summed up as ‘competitive regionalism’, a model of governance that emphasizes the importance of economic competitiveness and the regional dimension of socio-economic development. In all the case studies local governments, regional and local development agencies and organizations representing civil society play a very important role. Moreover, commonalities can be found in the local political economy, characterized by inclusive policy-making concerned mainly with the production of territorial competitive advantages – local collective competition goods – for ‘strategic’ sectors related to the knowledge economy and innovation (media industry, ICT, high quality services, advanced manufacturing) and to reinforce environmental sustainability and the green economy. The 2008 crisis had a significant impact on the local economy and labour market of the three cities and promoted changes in competitive regionalism, such as an increase in the importance of passive welfare measures to reduce the economic uncertainty of vulnerable workers. At the same time, the above-mentioned pillars of this model of local governance continue to play an important role.

The results of the research suggest three main policy implications. First, especially in times of crisis, national governments need to invest more resources in the promotion of local development. However, in all three countries, even before the crisis there was a contradictory tendency for competencies and the mobilization of local stakeholders to rise, but for funds and resources for local administration to be reduced. This has been exacerbated under the current crisis by the logic of austerity that has led to a further reduction of funds to local administration; without appropriate resources it is difficult to create an effective place-based political economy and this may result in lock-in in the field of socio-economic development.

Secondly, the mobilization and activities of local stakeholders and the launching of a large number of projects and plans require effective mechanisms of coordination, monitoring and policy evaluation. On the one hand, coordination is important to reduce duplication of effort and to create virtuous interaction between different plans and policies. We have emphasized how in some cases local government or agencies play this role, but there is large room for improvement. On the other hand, an effective process of monitoring and policy evaluation could help to promote well-targeted policies. For this reason it is important that local stakeholders set up effective measuring of socio-economic development based on qualitative and quantitative methods and on the identification of precise targets and policy goals. Naturally, the focus on indicators has some risks: in particular, it is difficult to isolate the impact of policies from many other intervening variables, and there are many important effects of local policies that are difficult to measure. However, ‘once their limits are taken into account, outcome indicators can act as a powerful tool to focus public debate on objectives and to motivate policy-makers’ (Barca, 2009).

Thirdly, negotiated policies may help to reduce the risks created by the crisis: they help to introduce a variety of views that can bring new elements and ideas into local planning and identify the ‘hidden’ needs of the local society. Naturally, mechanisms are needed that reduce the role of veto power and of long and inconclusive consultations between actors. In other words, it is necessary to promote effective negotiation processes, in which new actors and organizations may play a real and constructive role, avoiding ritualistic involvement aimed only at producing short-term consensus. For these reasons, effective negotiations can help to reduce socio-economic uncertainty and transform the mere rhetoric of ‘local stakeholders’ into innovative and effective policies.

These implications suggest that there is an important political space at territorial level for collective organizations such as unions and employers’ associations. At the national level, they can make an important contribution to the debate on regional development, even if this topic is often overlooked by unions. They could also aim at influencing measures to hinder the above-mentioned contradiction between devolution and the reduction of resources. At local level, unions and employers’ associations could also contribute to mechanisms of policy evaluation and monitoring for policies related to the labour market, welfare and territorial competitiveness. Finally, their participation is crucial for effective social negotiation that is able to create collective resources for the local society. However, the analysis of local governance in the three cities also emphasized some challenges for unions: for example, the efforts of local stakeholders are often directed towards promoting sectors in which they have very low membership. This could reduce their influence on the local political agenda. Another challenge is the general weakness of unions at territorial level: especially in countries such as France or the United Kingdom, the decentralized level of industrial relations is focused on the company level and not the territorial one. This can hinder their role in local governance. The fact that the changes in and main features of competitive regionalism entail opportunities and constraints for unions, their strategic choices and their ability to move between opportunities and constraints will influence their ability to reduce the externalities produced by market regulation at local level and to mitigate the long-term impact of the crisis (see Crouch, 2014).