Cities, regions and competitiveness

Competitiveness is a complex concept used in a variety of ways and contexts. The paper reviews some of the main ideas, particularly as they apply to cities and regions. Its definition should include the relative position of a region's firms in external markets, the productivity of local resources and the extent to which they are used. Competition takes both an institutionalized form (local public agencies competing overtly for investment and other resources) and, more importantly, a less organized form involving firms trading in wider markets. There are two contrasting perspectives on the competitive advantages of city-regions. One emphasizes the benefits of scale and diversity that flow from concentrations of economic activity. The other stresses the quality of the interactions between firms and supporting institutions. Recent studies suggest that the significance of localized business networks or clusters might be exaggerated and that a broader perspective of city-region competitiveness is required.