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Globalisation, Regions and the State: Exploring the Limitations of Economic Modernisation through Inward Investment

School of Geography, University of Leeds, Woodhouse Lane, Leeds, LS2 9JT, UK, n.phelps{at}geog.leeds.ac.uk

Mark Tewdwr-Jones

Bartlett School of Planning, University College London, Wates House, 22 Gordon Street, London, WCIHOQB, UK, m.tewdwr-jones{at}ucl.ac.uk

Over the past 10 years or so, the UK has witnessed intense interregional competition for a small number of large inward investment projects. These projects, examples of foreign direct investment (FDI) from Far East Asia, have been relied upon by nation-states as panaceas to the economic problems being experienced within older industrial regions. Central government has adopted a non-interventionist approach to FDI and has rather encouraged regional-level institutions of governance to provide innovative and competitive packages of aid to the prospective investors through the creation of customised spaces. By relying on this FDI, local and regional-level institutions within the UK have sought to reduce or eliminate those uncertainties associated with local governance and the planning system that would otherwise face potential investors. We discuss these issues with reference to three case-study FDI examples: LG in South Wales, Samsung in the North East of England and Hyundai in Scotland. These projects provide good examples of the prestige attached to large FDI projects by regional and local agencies: by-passing normal local democratic processes; instigating streamlined institutional processes; and ignoring environmental protection policies to `land' the projects for particular regions. But the collapse of the south-east Asian economies and the recent mothballing of both the Hyundai and LG plants illustrate some very immediate problems regarding the unsustainability of the nation-state both relying on the global market and subordinating local interstices to resolve regional economic problems. Overall, the paper examines how particular state forms and practices operate to privilege certain types of interests and activities at certain scales, and how particular state entities are attempting to capture agendas and decisions at particular scales of governance.

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				N. A. Phelps and A. Wood Lost in translation? Local interests, global actors and inward investment regimes J. Econ. Geogr., August 1, 2006; 6(4): 493 - 515. [Abstract] [Full Text] [PDF]