Regional Upgrading in Southern Europe: A General Framework

In order to understand the persistent underdevelopment of many of Southern European regions it is necessary to look deeper inside their socio-economic structures and the economic base of their countries. Uneven patterns of development can lead not only to increasing polarisation and regional disparities, but give rise to a negative structural effect hindering the ability of lagging regions to upgrade. The question of how lagging regions in advanced countries enhance and keep competitiveness remains widely unanswered and this is the main reason for editing a book on Regional Upgrading. Without upgrading, lagging regions risk remaining squeezed between the richest regions and the competitors from countries with lower labour costs. This chapter presents the main conceptual framework upon which the whole book is built, as well as the various building blocks which are then explored in the individual chapters. Upgrading is shown to depend on four main complementary drivers, each of them facilitated by the presence of adequate human capital or hindered by its absence: specialisation shift, product and process innovation, upgrading in the value chain and foreign direct investments. The presence of adequate policies and of good territorial characteristics makes the processes easier. The chapter also brings together some general findings of the whole book, in particular that the four countries of Southern Europe, and especially their poorest regions, share a number of similarities; the key role of human capital and the inability to exploit it in an effective labour market; the role of regional development policies, which have not necessary been ineffective but have certainly been insufficient to curb the relative decline of these regions. Some positive aspects also emerge, such as the ability to implement some types of innovation.