The theoretical bases of urban competitiveness : does proximity matter ?

In this paper we seek to accomplish two main tasks. The first is to lay out the different theoretical approaches to understanding the concept of competitiveness as it applies at the spatial level of city regions. We provide a definition of what the concept means at this level. We then examine the different but sometimes overlapping theories that seek to explain what makes city regional economies competitive. These include export base, increasing returns, knowledge and innovation, cluster and cultural economy theories. The second task is to understand the roles of different concepts of proximity in these theories. Here we make a broad distinction between spatial nearness, organizational interactions and cultural proximity. We conclude that all three of these play significant roles in the competitiveness of city economies with the most competitive successfully combining geographically local assets with knowledge and information from other places.