Research project SO/01/009 (Research action SO)
An analysis on sector and firm level and from geo-territorial perspective
Multidisciplinary introduction of concepts: network economy/ networking, internationalisation, globalisation
The employment effects of globalisation in a network economy can be analysed from different angles. The economics and business literature focuses on both the sectoral and the company aspects. In turn, the regional or geographic approach concentrates on spatial localisation factors. This project is unique by integrating those different points of view and by bringing together researchers with expertise in those research areas.
PART 1 Economic restructuring and employment in a global economy on a sectoral and a firms level
Enabled by the drastic decline in transportation and communication costs, the globalisation of industries has given rise to a new spatial organisation of production.. The emergence of global supply chains through which the production network of trans-national organisations interacts with outsourcing and external knowledge networks has become a prominent feature of the new global economy. Within these developments, the intra- and inter-organisational networks have profoundly affected the volume and composition of employment in regions and national states.
The sectoral reseach is based on the econometric estimation of a sectoral employment equation for the Belgian economy (see Slaughter and Swagel, 1997, Abraham and Konings,1999 en Abraham en Brock, 1998).
This equation is used to compute the following employment effects of globalisation:
(i) the export demand effect: the jobs linked to the expansion of exports
(ii) the competition effect: the destruction of jobs due to increased competition
(iii) the productivity effect: the shedding of labour when companies raise productivity under pressure of globalisation
(iv) the specialisation effect: the switch in the industry mix from unskilled sectors to activities with a high value added
(v) the human capital effect: the changes, induced by globalisation, in the relative employment levels of unskilled and skilled workers.
The sectoral changes in employment comprise. of important effects at the micro level. Within the network economy firms are able to restructure more easily their activities across the world resulting in a larger mobility of production and/or distribution activities. Next to exit and downsizing, relocating activities to other countries is an important form of corporate restructuring. Evidence by the Planbureau (1997) shows that Belgium has witnessed a large number of corporate restructuring the last five years. By simultaneously analysing the different forms of corporate restructuring and relating them to firm characteristics, the vulnerability of firms to the restructuring effects of globalisation can be adequately assessed within the framework of an econometric model.
PART 2 The consequences of a network economy on the territorial dynamic of regional economies in general and labour markets in particular.
Relevant criteria related to job creating economic growth certainly incorporates territorially linked location factors. The question remains whether and which spatial location factors have a fundamental impact on (regional) economic growth today, knowing that networking becomes a key element in the present-day economy, often on a global scale. It is obvious this is of major importance for regional push and pull factors for foreign enterprises (exogenous growth), as well as on the internal regional dynamics. Differences in regional dynamics are very much related to the way and the degree by which regions (don’t) succeed in using local elements for economic growth and are (un)successful in keeping activities of firms and clusters within their own territorial boundaries.
In a network economy, location remains important, despite evolutions in transports and communication, since location continues to be a strategic element within the management of the (multinational) firms (Amin, 1997; Borja & Castells, 1997; Kanter, 1995; Lee & Wills (eds), 1997; Lipietz, 1993; Phelps et.al., 1998; Sassen?, 1996; Storper, 1997).
This part of the project proposal joins the international research community dealing with the impact of the network economy on territorial relationships and territorial stability of economic activities, the (f)actors concerning local economic growth, shifts and evolutions in location factors and in the location behaviour of foreign/ multinational firms. In the literature these research questions are assessed from the so-called global/local -paradox that deals with the ‘contradiction’ between the increasing globalisation and - at the same time - the increasing importance of local specific elements in regional performances. Within these specific local elements, the characteristics of labour market become a key element. There is a shift of interest and approach from the quantitative to the qualitative aspects and towards knowledge and information driven requirements. Within Belgium it is not clear how the (characteristics of) the labour market act as a location factor. Neither is it clear whether the structure of the labour market is really a driving force for regional development or only of secondary importance. Therefore the position of labour market among other location factors has to be questioned.
Contemporary international literature on local economic development focuses increasingly on knowledge accumulation in a territorial learning process that is made possible by specific social-cultural conditions (e.g.. Asheim 1996, 1998 and 1999, Malmberg/Maskell 1997, Storper 1995 and 1999). Porter’s idea about clusters and clustering (1998) too, is strongly inspired by this approach. The exploration of the Belgian labour market structure as a location factor will fit in this approach.
Policy implications and multidisciplinary integration of conclusions will be formulated in the final report.
Belgische werkgelegenheid in een mondialiserende economie : impact op de micro-economische en de geografisch-territoriale structuur : eindrapport
Vanneste, Dominique - Abraham, Filip - Cabus, Peter ... et al Gent : Academia Press, 2003 (PB6001)
Perte, création et maintien d'emplois dans une économie mondialisée: une analyse sectorielle, au niveau de la firme et sous une perspective géo-territoriale : résumé
Bruxelles : Politique scientifique fédérale, 2003 (SP1235)
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Verlies, schepping en behoud van banen in een gemondialiseerde economie: een analyse op sectoraal en ondernemingsniveau en vanuit een geografisch-territoriale benadering : samenvatting
Brussel : Federaal Wetenschapsbeleid, 2003 (SP1236)
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Loss, creation and maintenance of jobs in a global economy: an analysis on sector and firm level and from geo-territorial perspective : summary
Brussels : Science Policy Office, 2003 (SP1237)
[To download]
Bibliografic references :
