Building Regional Innovation Systems: Is Endogenous Industrial Development Possible in the Global Economy?

Abstract

Economic globalisation refers to the shift of the world economy towards an increasingly supranational functional integrat ion co-ordinated by tr ansnational corporations (TNCs) (Dicken et al 1997). In those sectors where these tendencies are strongest (such as the automotive industry and electronics) , globalisation has led to a steadily increased influence of TNCs over national industries. In part, this takes place through corporations establishing or buying firms in different areas of the world, and in part through the linking of formally independent companies to TNCs as subcontractors and suppliers. In this way large numbers of firms are linked together in networks that are directly or indirectly co-ordina-ted by the headquarters of TNCs. The expressed or implied message of many contemporary analyses of globa-lisation is that the balance of power in the economy is tipped in favour of TNCs at the expense of nations and regions, as more and more fi rms and regional production systems are incorporated in global commodity chains (Storper 1997). Decisions on, amongst other things, downsizing, closure and relocation of firms,