Regional Development and the Production of Space: The Role of Infrastructure in the Attraction of New Inward Investment

Abstract

The continuous renewal and improvement of infrastructure within Europe are widely regarded as a very necessary part of any regional development strategy, particularly in regions which are economically and geographically peripheral to the core industrialised regions. This paper is a review of some of the problems associated with modelling the relationship between improvements in infrastructure and regional economic growth specifically in the context of the attraction of new inward investment. An illustration from northeast England is used to argue that it is increasingly untenable to regard infrastructure as an independent variable influencing the regional distribution of mobile investment. Although the presence of certain basic infrastructure may be significant in attracting the initial interest of potential new investors, success in winning inward investment projects depends increasingly upon the ability of public authorities to produce spaces which are customised to the changing needs of key firms. This process of infrastructure modification and adaptation challenges simplistic interpretations of the role of infrastructure in regional economic development. Examples demonstrate how inward investment projects can be levered into a region by means of a variety of incentives including promises of rapid infrastructure modifications. The experience of Nissan is used to illustrate how an investor can subsequently engage directly in the production of its own customised space through the control exercised over regional authorities. It is concluded that this area of research and policy formation would benefit from insights into the political processes which occur at local levels in the modification and production of space.