Clustering and Networking in Regional Policy

The approach to the development and competitiveness of regions can be seen on the basis of examining economic concepts, starting from classic economics (Smith, Ricardo). In the classic economic theories, competitiveness was associated with the phenomenon of the division of labour which provides for economies of scale and differences in productivity across nations.1 In the concept by Ricardo on the basis of the phenomenon of comparative advantage, the fundamental meaning connected with competitiveness referred to the benefits of international trade gained by particular countries.2 Similarly, in neo-classical theory trade is deemed to be the engine of growth. Furthermore, it is deemed that free trade will equalise the prices of output, goods and, in turn, the prices of the factors of production (capital and labour) will also be equalised between countries. Whereas classic economists treated capital and labour as two independent production factors, the Keynesian theory assumes capital and labour to be complementary. The Keynesian theory assumes that governments can successfully intervene in the cycles of the economy. This theory is of greater importance in the case of the policy of creating competitiveness of regions as state interventionism is evident and the convergence of regions can be achieved through economic policy.