To Them That Hath: Economic Complexity and Local Industrial Strategy in the UK
26 Pages Posted: 7 Dec 2019 Last revised: 2 Sep 2020
Date Written: November 21, 2019
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: Suggested Citation