Dynamic Capacities in Promotion of Economic Development of City-regions

Traditionally policy-making in urban economic development (UED) is based on a fairly well established belief in the capabilities of policy-makers to find the correct strategies for the future by rational planning. I argue, based on series of studies focusing on UED-policies, that in a knowledge economy the nature of UED-policies are changing, the new forms of power are emerging and consequently the significance of leadership is rising. It also seems that UED-policies are often too administrative in nature and true leadership is easily lost in the jungle of old thinking, development plans, rules, etc. In Finland, in the era of building the welfare state, ?leadership? in public organisation required good administrative skills, knowledge of various statutes, and the ability to follow instructions correctly and efficiently, or could it rather be said that the System as a whole had leadership. The knowledge economy is so clearly more complex, more blurred, more dynamic and more penetrating that policy-makers are forced to learn new skills and become more skilled in leading transition and interactive processes, not only in administrating resources and formulating development programmes. I argue that there should be more emphasis on leadership both in research and in the communities of practice. In order to be able to influence events, leaders have to act in the riptide of different interests and aims, and find a totally new range of means that can be applied in different events. It should also be noted that leadership may be seen as the effect of actors on one another and it may be that the promotion of regional development has several leaders having different qualities in leading. In order to be a leader, individual or an organisation engaged in promotion of urban economic development need, in most simple terms, a) to go before or to show the way, b) to influence or to induce, c) to go head of or in advance of, d) to have the advantage over, e) to act as leader, f) to go through or pass and g) to act as guide (source: the Webster?s dictionary). But what is to lead in a complex, ambiguous and muddled process of urban economic development? How to go before or to induce or to act as guide if one does not have formal power to do it? How to go ahead of, if one has formal position but is not respected? This paper answers these questions, among others, by analysing leadership in two Finnish city-regions; Tampere and Jyväskylä. First, theoretical framework that places leadership in a wider conceptual context is scrutinised. Secondly, the development policies of Jyväskylä and Tampere focusing on knowledge economy are described, thirdly, the cases are analysed from the leadership point of view, and fourthly the modes of leadership are elaborated and the new forms of power deliberated.