Industrial strategy and the UK regions: sectorally narrow and spatially blind

an article by Steve Fothergill, Tony Gore and Peter Wells (Sheffield Hallam University, UK) published in Cambridge Journal of Regions, Economy and Society Volume 12 Issue 3 (November 2019)

Abstract

The UK government’s new Industrial Strategy could have a significant impact on the country’s regions and localities.

However, this has received little attention to date.

The analysis presented here examines the existing location of the sectors targeted by the first phase of the Industrial Strategy Challenge Fund and the location of the RandD laboratories likely to be first in line for funding.

In focusing on an extremely narrow range of sectors, the Fund is likely to have limited impact on the UK’s persistent regional inequalities. The activities eligible for support account for relatively little of manufacturing or the rest of the economy and the basis of this targeting and its potential distributional consequences are spatially blind.

As such, it runs the risk of widening regional divides in prosperity.

JEL Classification: L52, O25, R11

Full text (PDF 22pp)

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Techies, trade, and skill-biased productivity

a column by James Harrigan, Ariell Reshef and Farid Toubal for VOX: CEPR’s Policy Portal

Economists have studied the nexus between labour demand, globalisation, and technology adoption for decades, but quantifying the relative importance of these factors is challenging.

Using firm-level data from France, this column proposes a new measure of productivity based on the number of workers in technology-related occupations.

It finds large effects of importing, ICT, and R&D on the relative demand for skilled workers through their effects on productivity. Interestingly, the demand for both skilled and unskilled workers rises when firms hire ‘techies’ or engage in offshoring.

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