Part B Theories
Urban entrepreneurialism, agglomeration, and Keynesian managerialism
The role of the planner has changed massively in many countries. After the Second World War planners played a crucial role in creating new towns, supporting significant state investment in social housing, or relocating jobs to deprived regions. In contrast, more recently planners are asked to facilitate market-led development in an era of intensified inter-urban economic competition. In 1989, David Harvey captured the essence and importance of this shift in a prescient article, explaining it as a move from Keynesian Managerialism to Urban Entrepreneurialism. He highlighted how, from the 1970s onwards, planners and other local actors were increasingly working in new publicâprivate partnership arrangements to make their localities attractive to the global flows of mobile capital, from Japanese car plants to Chinese real estate investors. This involved a range of new business friendly ideas and initiatives, at the forefront of which was the cutting of âred-tapeâ.
To understand the significance of this shift in societyâs expectation of planners, it is worth reflecting on the dominant ideas and range of tools at the disposal of planners following the Second World War. John Maynard Keynes was a hugely influential economist whose work argued that during economic downturns governments should increase state spending as a counterbalance and support employment by creating new publicly funded jobs. In the US, Rooseveltâs New Deal investment was widely credited with helping the country emerge from the 1930s Great Depression while creating a long-lasting physical legacy of new infrastructure, such as dams and roads. Rather than follow the trend of market cycles, Keynesianism argues governments should act while money is cheap and invest in counter-cyclical measures to stimulate economies. New tripartite structures emerged as governments sought to find common ground between themselves, business, and trade unions. For instance, higher taxes might help business by supplying better educated, healthier workers, while paying higher wages would mean more money being spent on goods and services.
By the early post-war years, variants of this approach had become widely accepted by many Western governments, leading to the period that Harvey refers to as Keynesian Managerialism. In the case of the UK, there was a widespread social acceptance of a more interventionist and redistributive state, from the creation of the National Health Service to state pensions and the creation of a national planning system. As part of this expansive vision, planners set about a radical re-writing of the national urban geography, creating plans for moving jobs and people over large distances in pursuit of a better spatial redistribution of work and opportunities. Planners could prevent factories in buoyant regions from growing further and instead offer incentives to expand in other parts of the country where there was higher unemployment, using a mixture of the âcarrotâ (financial incentives or advance factory estates) and âstickâ (refusal to grant planning approval). In addition, planners could designate and promote new towns and town extensions in areas deemed appropriate. The effects of these policies are still in evidence, from Milton Keynes and Croydon in the South East catering for overspill from London, to Skelmersdale, Peterlee, and East Kilbride in less prosperous regions. In France, the government adopted similar interventionist policies promoting what it referred to as âgrowth polesâ, drawing on agglomeration economics to argue the case for building substantial new urban centres able to offer large-scale industries such as steelmaking, the benefits of advanced infrastructure, and large pools of skilled labour.
The ability of, and indeed faith in, the planner as a visionary able to conjure up major interventions was to prove short-lived. Though popularly attributed to the planning failures of the era, in particular comprehensive redevelopment schemes to replace Victorian âslumsâ with high-rise public housing, the reality is that those ideas for interventionist planning measures were affected by major changes in technology and in the international economy. With increases in the speed and costs of the international trade in goods and services allied to measures to reduce barriers to trade and the movement of capital, businesses were able to rethink their investment strategies on a global scale, searching for locations able to offer advantages like cheap labour, lower taxes, or subsidies for relocation. The âstickâ in the plannerâs toolbox quickly lost its threat if it meant firms could move overseas.
New international divisions of labour were emerging, whereby large global companies could relocate parts of their activities to where labour conditions best suited them. So corporate head offices might locate near the major financial centres, R&D activities move close to universities with their pools of graduate labour, and routinised, de-skilled functions to where labour was cheap or union laws weak. Around the world, governments came under competitive pressure to reduce taxes and trade barriers, introduce restrictions on trade unions, and facilitate the international movement of capital, skilled workers, goods and services, or be âleft behindâ. One way of thinking about this is to imagine, circulating out in the ether, global flows of capital, ideas, technology, and skilled workers, all searching for suitable locations to settle, each of which brings the promise of new jobs and a boost to the local economy. The role of government and planners then becomes to create the conditions that would attract this mobile investment their way and to ensure existing businesses did not desert them in favour of better offers elsewhere. The brand of inter-urban, inter-locality place-based competition required new forms of urban entrepreneurialism, city leaders willing to shake off the âbad habitsâ of Keynesian Managerialism and instead seeking to grow the local tax base by engaging productively with business about the conditions in which they could thrive, such as cheap sites for factories close to motorway junctions or city-centre sites for offices well served by public transport.
A whole constellation of theories emerged attempting to explain this shift to international competitiveness and the role of the state within it. Just why did some areas flourish more than others? Was it simply about new models of industrial organisation, such as the use of just-in-time techniques? Or what could be learned from the so-called New Industrial Districts and successful growth clusters in diverse areas like Silicon Valley, Baden-WĂźrttemberg, and Emilia Romagna (Raco, 1999)? There was also something place-based to consider, particularly how to create conditions conducive to competitive success, such as building supportive local institutional frameworks or new models aiming to blend competitive and cooperative working to stimulate growth and expansion, such as work on regional and national innovation systems. Such theorisations of the ânew regionalismâ have, however, been subject to considerable critique, perhaps most famously by John Lovering (1999) who argued that the theories were weak in demonstrating causality, yet proved politically attractive to certain policy interests, who in adopting them redistributed power and resources to certain interests over others.
Theories adopting a specifically urban focus emerged from the US, aiming to examine how public and private sector elites set out to shape local policy environments to better serve the needs of business, most notably urban growth machine and urban regime theory. While both theories were widely discussed elsewhere, in European academia the emphasis was more on governance and public-private partnerships. Though hugely different in their intellectual roots and explanatory power, all sought to provide a better understanding of the new role of governments and planners in enabling growth or managing the consequences of spatially and socially unbalanced development. New models of successful urban entrepreneurialism beyond business competitiveness also emerged from the 1990s onwards, as cities such as Barcelona and Portland seemed to promise new ways to attract businesses and the economic value of improved liveability became apparent. Arts and culture policies became acknowledged as a key tool in the city management repertoire, as policy-makers travelled the world in search of ideas to take home and a new generation of policy gurus promoted policies supporting the so-called âCreative Classâ, issues discussed in more detail in the section on policy mobilities and mobile urbanism.
The more profound challenge for theory is that the localist rhetoric of urban entrepreneurialism is often disconnected from investment or support from central government. To take the example of the UK, as a response to the 2008 Global Financial Crisis, central government dramatically reduced local government funding and spending on redistributive policies for poorer areas under the guise of austerity politics. At the same time, it adopted a rhetoric of localism and advocated the devolution of greater resources to local actors as a âgame changerâ by which successful urban policy entrepreneurs could come together at city regional scale to bid for new powers and resources. In this new vision, governments would invest in larger city-regions where actors had demonstrated their urban entrepreneurialism, such as Greater Manchester, which had invested in a new tram network and airport expansion. Intellectually, this was justified by some academics and the government by a blinkered reading of agglomeration economics. In this version, the UK spatial economy had a productivity gap, as the size advantage of London and the South East meant that it pulled away from the rest of the country, reflecting its larger labour market, attractive range of cultural institutions, and infrastructure. If bigger is better, then other parts of the country should then seek to emulate Londonâs success, not drag it down by carping about how government investment has favoured London, but instead pull themselves up by their own bootstraps rather than putting out the begging bowl (to mix some metaphors).
Yet, the problems with the agglomerationist approach are many. It plays down that big is not always beautiful and there are negative externalities often associated with size, from air pollution to congestion to unaffordable housing. Another way of thinking about how agglomeration theory has been used to push a âbig is bestâ version of urban policy is to think back to Ernst Friedrich Schumacherâs famous environmental argument that âsmall is beautifulâ, with its powerful message that in an era of globalisation, large corporations and big government, there is much to be said for thinking small when it comes to connecting with nature and each other.
The âbig is betterâ philosophy adopted to promoting devolution deals to city-regions in the UK has seen some areas benefit from a reallocation of government resources, while poorer areas have been left to flounder, denied public investment because the government was advised that it should not âspread the jamâ too thinly. The worst con trick of all, however, has been how UK central government has treated local government with contempt, quietly cutting core budgets, while making a great fanfare over the seeming largesse of allocating existing pots of money, such as transport investment, to city-region scale actors for distribution instead of central government (Haughton et al., 2016). It is also worth emphasising that not all local coalitions of actors have bought into the dominant view of urban entrepreneurialism, indeed the agglomeration approach inspired a backlash particularly among those from the âleft behindâ areas. Many are developing their own alternatives or searching for examples from elsewhere, leading to a growing interest in ideas such as inclusive economies and promoting anchor institutions, the approach recently adopted in Preston (see below), and cooperative models, such as Mondragon (see below).
Further resources
Harvey, D. (1989) From Managerialism to Entrepreneurialism: The Transformation in Urban Governance in Late Capitalism. Geografiska Annaler. Series B, Human Geography 71(1): 3â17. https://doi.org/10.2307/490503.
Haughton, G., Deas, I., Hincks, S. and Ward, K. (2016) Mythic Manchester: Devo Manc, the Northern Powerhouse and Rebalancing the English Economy. Cambridge Journal of Regions, Economy and Society 9(2): 355â70. https://doi.org/10.1093/cjres/rsw004.
Lovering, J. (1999) Theory Led by Policy: The Inadequacies of the âNew Regionalismâ (Illustrated from the Case of Wales). International Journal of Urban and Regional Research 23: 379â95. https://doi.org/10.1111/1468-2427.00202.
Raco, M. (1999) Competition, Collaboration and the New Industrial Districts: Examining the Institutional Turn in Local Economic Development. Urban Studies 36(5â6): 951â68. https://doi.org/10.1080/0042098993295.
The inclusive economies approach of Preston has attracted considerable political attention as an alternative to standard entrepreneurialism, including several articles by Guardian journalist Aditya Chakrabortty. These two summarise the context and the approach:
https://www.theguardian.com/commentisfree/2018/jan/31/preston-hit-rock-bottom-took-back-control and
https://www.theguardian.com/commentisfree/2019/mar/06/brutal-cuts-fight-back-preston-dragons-den. The Mondragon cooperative model also attracts considerable media attention as an alternative approach to regional economic development: see
https://www.theguardian.com/commentisfree/2012/jun/24/alternative-capitalism-mondragon and
https://theconversation.com/the-mondragon-model-how-a-basque-cooperative-defied-spains-economic-crisis-10193.
Neoliberalism
The term neoliberalism tends to generate polarised views. It has led to a considerable body of academic work, including literature on planning, which seeks to describe its ideas, explore how they permeate politics and policy, and analyse the problems they pose. Alternatively, it is not uncommon to hear of politicians claiming to be exasperated by fancy academic talk about something called âneoliberalismâ, a label they frequently say they do not recognise, that it is instead a means to undermine either their political party or the much-needed reforms they are advocating. In effect, their complaint is that neoliberalism is an idea by which (usually left-leaning) critics bludgeon those they disagree with based on an assumed moral high ground.
So what is neoliberalism? For academics, it represents a fundamentalist free-market or economic laissez-faire philosophy that is central to understanding the nature of planning reforms since the 1970s in diverse countries, but most notably in the US and the UK. Its key features are a belief that unfettered markets achieve better outcomes than governments and that excessive government regulation undermines indivi...