Published on 18 February 2019

André Torre, Research Director in Economic at INRA/AgroParisTech, discusses the processes of territorial development.

This contribution is based on the article entitled "Les moteurs du développement territorial", published in N.4/2018 of the Revue d'économie régionale et urbaine (Armand Colin Publishing), of which André Torre is the editor-in-chief.

The "yellow vest" crisis has put the issue of territories back at the heart of the political arena in a very concrete way. After a phase of verticality and Jupiterian exercise of power, without consultation with the local level, the urgency now appears for a reconnection to the territories and a debate with their stakeholders. The revolt that is rumbling has been fuelled by historical errors such as the gradual abandonment of public services in peripheral areas, or the disinheritance of secondary roads and railways.

The ongoing major debate, which does not only concern the territorial dimension, has a very local connotation. It is clear that a country's development cannot be satisfied with the major macro-economic guidelines. It is largely based on its different territories and it requires an agreement between local inhabitants and companies. It is useful to explain that territorial development, now touted as such, is a two-pronged process, increasing wealth and improving people's well-being. Its two main drivers, production and governance, give rise to territorial innovations of all kinds, both creative of innovations and destructive of old models.

The central role of territorial governance

Development is not only about economic dimensions. It covers many other aspects, such as mental and social changes of populations, or the evolution of institutions, and cannot be implemented independently of governance processes. Governing is simply about making decisions, arbitrating oppositions and conflicts, managing modes of production, and contributing to the regulation of economic and social activities (where possible). In countries such as France, territorial development is fuelled by the expectations of increasingly attentive and educated populations, who wish to play a role in defining challenges and paths for the future. They have an interest in taking charge of their development projects to decide on their future and to control it.

Territorial governance is based on two principles, which are seemingly opposed but in reality complementary. On the one hand, cooperation between local actors: how they work together to develop common projects and put their disagreements on the back burner to project themselves in the future. This is the work of local committees and institutions, charters, but also daily collaborative relationships. The second principle is that of conflict: when public authorities, or major actors such as large companies, launch projects that face opposition from the population, it becomes inevitable. It will be expressed on the street, in the courts or in the media, as in the case of Notre-Dame-des-Landes.

These two modes of governance produce innovations and novelties, social and institutional. Cooperative innovations such as solidarity microfinance, think tanks, third places, shared nurseries or solidarity grocery stores are the result of the joint effort of local actors. Disruptive innovations arise from the modification or remodelling of a project by the opposition of all or part of the population: the redesign of a expressway, or the modification of a power plant project. Both give rise to development processes, from a very Schumpeterian perspective.

Territorial development driven by production

The concern for territorial public action must not lead to neglecting the other dimension of development processes. The development of territories is inseparable from productive activities and their local anchoring, with two central dimensions: technological innovation and local networks of producers and laboratories. Development is first of all production: more, perhaps better, sometimes less...

The implementation of development paths cannot be based on the transfer of wealth for long; it is based above all on the mobilization, exploitation and sometimes export of territorial resources. The role played by productive systems, their innovations, networks and multiple interactions, is essential here. Clusters or business ecosystems, as illustrated by the well-known examples of Silicon Valley or, for example, the programme for the development of competitiveness clusters in France, are particularly important in creating and disseminating technological innovations. But not only. They are also alternative solutions such as the development of the circular economy, recycling processes and industrial ecology, or short food circuits, which also implement organisational innovations.

Recycling processes can lead to the emergence of new types of organizations. HildaWeges/Shutterstock

Competition relations are not always exacerbated at the territorial level, where oligopoly and monopoly situations often dominate. This excepts service and marketing activities, where competition rages between different brands or traders. On the other hand, companies often combine competitive and cooperative relationships, alliance or opposition strategies depending on the functions concerned (R&D, production, marketing, etc.). Their collaboration is primarily a strategy of pooling or exchanging skills and knowledge, with the objective of achieving productive gain or manufacturing common products.

A winning combination

The process of territorial development is thus born from the combination of the productive and governance dimensions, the humming and sometimes the roar of these two motors. Conflicting and cooperative relationships thus give rise to territorial innovations.

On the one hand, discussion is essential to democratic societies, especially when it takes a public form. Exchanges and communication build agreements, structure oppositions and help to clarify or resolve them. Discussing, elaborating, contesting, including in social networks, is an essential part of territorial development processes, and allows the diversity of actors' intentions to be expressed.

On the other hand, companies, private and public services, farms shape and use territorial resources. Technological and organisational innovations, whether locally developed or externally adapted, generate new products, new manufacturing methods and new companies. By rendering old ways of doing things obsolete, they threaten existing jobs and structures, and contribute to the reorganisation and evolution of the local socio-economic fabric.

The original version of this article was published in French on The Conversation.