To Them That Hath: Economic Complexity and Local Industrial Strategy in the UK

26 Pages Posted: 7 Dec 2019 Last revised: 2 Sep 2020

See all articles by Penny Mealy

Penny Mealy

University of Oxford - Institute for New Economic Thinking at the Oxford Martin School; University of Oxford - Smith School of Enterprise and the Environment; Bennett Institute for Public Policy

Diane Coyle

Bennett Institute for Public Policy

Date Written: November 21, 2019

Abstract

Divergent economic performance in many countries has led to renewed interest in place-based policies, such as the UK’s local industrial strategies at the level of Combined Authorities or Local Economic Partnerships. However, an analysis of employment data using methods from the economic complexity literature demonstrates great heterogeneity in industrial strengths and future growth opportunities within those jurisdictions, raising challenges designing common policies suited to all sub-geographies. Moreover, the ‘related’ industries into which low-complexity, low-wage local authorities could potentially diversify are also low-wage. Incremental policies building on existing local capacities are therefore likely to amplify divergence between prospering and left-behind areas.

Keywords: economic complexity; relatedness; regional economic development; industrial strategy; place-based policy

JEL Classification: O25, R10, R58

Suggested Citation

Mealy, Penny and Coyle, Diane, To Them That Hath: Economic Complexity and Local Industrial Strategy in the UK (November 21, 2019). Available at SSRN: https://ssrn.com/abstract=3491153 or http://dx.doi.org/10.2139/ssrn.3491153

Penny Mealy (Contact Author)

University of Oxford - Institute for New Economic Thinking at the Oxford Martin School ( email )

Eagle House
Walton Well Road
Oxford, OX2 6ED
United Kingdom

University of Oxford - Smith School of Enterprise and the Environment ( email )

United Kingdom

Bennett Institute for Public Policy

7 West Rd, Cambridge
Cambridge, CB3 9DT
Great Britain

Diane Coyle

Bennett Institute for Public Policy ( email )

Alison Richard Building
7 West Road
Cambridge, CB3 9DT
Great Britain

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