Letter: The right recipe for the regions

You ask whether the regional development agencies have really achieved anything in the past year (Cover story, 31 March). But perhaps the more fundamental question is what exactly they should be doing. Any kind of regional meddling starts to get problematic. Efforts to encourage inward investment will all too often lead to the situation where […]

You ask whether the regional development agencies have really achieved anything in the past year (Cover story, 31 March). But perhaps the more fundamental question is what exactly they should be doing.

Any kind of regional meddling starts to get problematic. Efforts to encourage inward investment will all too often lead to the situation where taxpayers’ money is used to woo foreign companies that will then set up with all the advantages of state-of-the-art plant in a first class location with good transport links – and proceed to wipe the floor with some of the existing, indigenous firms. These may have invested wisely in what they have got, but simply don’t have the means to transplant the whole firm to the development area.

You could view almost any kind of regional policy as a distortion. The example above exposes local companies more quickly to international competition. At the other extreme, another kind of abuse of regional policy leads to the support of activities which market forces are strongly signalling should change or disappear.

We can criticise the RDAs for looking fairly unexciting in the kinds of projects they have undertaken so far, but at the same time, if they were to attempt to pick winners, prop up ailing industries, or engage in bidding wars to hand out sweeteners to inward investors, we would be quick to complain.

Perhaps the only route which will be universally acceptable will be relatively low-budget tinkering to try and make a difference to skills levels or to encourage collective marketing campaigns among industry sectors. The kind of talk we hear of their `clusters’, `corridors’ and `portals’ sounds extremely grand, but in the end these kind of things are created by vibrant and successful companies with the resources to relocate, not by planners behind desks.

So let the RDAs go on talking a good story, as you put it. But let’s not look to them for too much action. Let’s leave that to industry.

Mike Taylor, by e-mail