Strategies of Modernisation: The Market and the State

The strength of regional and national economies continues to depend critically on the success of manufacturing activities. Manufacturing therefore matters. With the increasing globalisation of economic activities, however, regional economies will also depend to an increasing extent on investments that are international in character, control, and ownership. Industrial modernisation and an optimal long-term allocation of resources require a series of state-led initiatives in the spheres of innovation and new technologies. There is, however, a contradiction between the internationalisation of production and the national character of economic regulation. The appropriate scale for industrial intervention is increasingly supranational. It is at this scale that capital is organised and where there is in any case a need for countervailing political power. At the same time there is evidence of a greater local embeddedness of successful productive activities. In these circumstances the development of local potential assumes increased importance. Attention is therefore paid to the respective roles of market and nonmarket modes of coordination of skill and infrastructure provision. In each of these areas, private and market provision are inadequate. Increases in regional resource endowments and the development of an advanced industrial and social infrastructure require organisation, collective action, and active interventionist regional and supranational states.