What does the study of regional science help us understand? What are the three “building blocks” that underlie the complex patterns of location of economic activity? Should jobs move to people or should people move to jobs?
Regional science is a sub field of social sciences that analyzes approaches to urban, rural, or regional problems. It involves the study of spatial patters to analyze the economic factors of a region. The study of regional science is necessary to improve the economy in today's competitive global market. This study helps the government organizations to identify and make efficient use of public resources by implementing best practices to meet the expectations of the general public (Nancey & Blakely, 2013). The primary goal of regional science is to frame an economic development policy to improve the economic condition of a particular region. Regional science helps the organizations to take necessary steps to develop the quality of a region such as to provide good educational opportunities, improve transportation facilities and build good infrastructure.
The level of economic activity of a region is determined by three building blocks. The first building block is uneven distribution of the topography that helps to explain a location. It is decided by the location’s access to markets for its goods (Nancey & Blakely, 2013). The second building block is economies of spatial concentration. Availability of raw materials, skilled and cheap labor is the major determinants of the location of an economic activity. Cost of raw materials contributes to the bulk of the total cost. Cheap and skilled labor is also necessary to give the best productivity with the use of latest technology. The third building block is imperfect mobility (Nancey & Blakely, 2013). Conveyance to the location plays a vital role. The location should easily be accessible to roads, rails and waterways as these are the efficient and low cost modes of transportation. It is very important to cut down the costs of communication and transportation as these factors may place a limitation on the location. Power resources such as electricity should be readily available to carry on the economic activity in a smooth way.
People think that job opportunities can be improved by relocating. Talented people are the major part that leaves their hometown to maximize their job opportunities. Employment has seen drastic changes over the past few years. People have been migrating to cities in search of better opportunities (David, 1999). This migration in search of employment can be very closely related to the natural amenities available in cities. In the past, people were attracted to rural areas due to the availability of fertile land, natural resources, and vast residences. However, the scenario has changed over the past few years. With the development of technology and growth in infrastructure, people are more inclined towards cities as cities have abundant opportunities for employment (David, 1999). Cities have high wages and a great living standard and this is the main reason that there is a lot of inclination toward urban regions. However, in the rural areas, the scenario is different. There is more scope for high availability of low cost labor, plentiful natural resources and cheap access to cities and these are the main reasons that the businesses are establishing their units in the rural areas. Hence both people and jobs are interdependent on each other (David, 1999).
What is business climate? How is it measured? Why should composite indexes and rankings be treated with caution?
Business climate is defined as the environment that analyzes the attitude of government and finance companies towards businesses, attitude of workers towards their employers and evaluation of a business based on several factors that include taxation, inflation rate and other determiners to provide a positive idea regarding a financial system (Dijkstra & Kozovska, 2011).
Economic research has shown evidence that a positive business environment promotes the overall growth of an economy. There are various factors that affect a business environment. Some of the factors include law, public institutions, infrastructure, technology and fair use trade policy. Various methodologies and ranking systems have been developed for evaluating business environments across different countries. Each ranking system uses a unique approach to evaluate the business climate. The forum will enable the various presenters and audience members to discuss similarities and differences in four international ranking systems and explore how the rankings may be used together in promoting enterprise development projects and overall economic growth (Dijkstra & Kozovska, 2011). Many of the reports based on the ranking system help the businesses to concentrate on areas of development and take appropriate measures to cut down the taxes and reduce the regulations. A few of the indexes used to measure business climate are economic freedom index, fiscal policy index, business survival index and many others.
The composite indexes and rankings should be treated with caution because these are the determiners of a state’s economic and potential growth (Dijkstra & Kozovska, 2011). These indexes help the businesses to compare strategies, make investment decisions using quantitative data and evaluate the accuracy of the decisions. With measurement, understanding and comparison between the indexes of various businesses, decisions can be made with more knowledge and better understanding of the advantages and disadvantages.
What are the arguments for pursuing regional competitiveness? Describe the role of productivity, creativity and innovation in regional development?
Regional competitiveness is essential for a business to grow, compete and obtain profits the global market in terms of price and quality (Kitson & Tylor, 2004). It can be categorized into three major indicators, namely infrastructure and accessibility, human capital, and innovative capacity. Infrastructure includes basic transportation facilities such as road, rail and waterways and technological infrastructure such as telecommunications and internet. Human capital includes productive and flexible workforce, professional and efficient management workforce to drive the labor, and high skilled labor such as engineers and scientists. Innovative factors include research and development, exports to global markets, concentration of employment and many others.
Despite the existence of strongly competitive and uncompetitive firms in a region, there are various other factors that contribute to regional competitiveness. The ability of a region’s economy to convert its assets into profits by competing in the global market is also essential (Kitson & Tylor, 2004). A decline in the productivity growth of a region in turn leads to the decline in the competitiveness of the region. In addition to productivity, regional competitiveness is also concerned with the market structure. One needs to understand that productivity is just a measure of the resources necessary to produce a given unit of output (Kitson & Tylor, 2004).
Creativity and innovation are the forces that drive the businesses to grow economically. Innovative capacities of a firm are determined by various factors such as its competitors, available human capital, regional laws and regulation. Public institutions also play a vital role to drive innovation beyond the growth of an economy. The other factors that reflect innovation in regional development are human resources in science and technology, and R&D projects of a region (Kitson & Tylor, 2004). High quality labor and trade supporting infrastructure are the modest factors of regional development. In order to stay ahead of global competition, innovation plays an important role as the inflow of highly talented human capital is only attracted by the innovative technologies employed in the region (Kitson & Tylor, 2004).
What is entrepreneurship, why is it important in economic development, and what are the main factors that influence a country’s or a region’s entrepreneurial activity?
The capability and willingness to develop and organize a business venture to withstand the risks in order to make profit is known as entrepreneurship. The most common example of entrepreneurship is setting up a new business. Entrepreneurship when combined with infrastructure, human capital, natural resources and investment can produce greater profit . Entrepreneurship is characterized by innovation and risk management. It is an essential part of a region to succeed in the increasingly competitive global market. Entrepreneurship is a creative activity. It is an outcome of complex factors such as socio-economic, technological and legal factors (Kilby, 1971). Entrepreneurship involves a combination of investment, technology and human capital. Entrepreneurship can exist in any field, such as government, business, economic and non-economic institutions (Charantimath, 2006).
Entrepreneurship is developed through planned efforts and helps to bridge the gap between science and market by setting up new businesses. Entrepreneurship plays a crucial role to shape the industrial health of a society. A region might remain backward due to lack of entrepreneurial talents (Hisrich-Peters). Entrepreneurship is a discipline which includes models, processes and case studies, which assist an individual to understand the concepts and become a successful entrepreneur. Innovation is one of the most important functions of entrepreneurship as entrepreneurship always involves new products, new methods and new designs to compete in the global market (Prasain, 2003). Entrepreneurship requires quick decision-making in an environment of risks and uncertainties. Anticipating and taking risk results in greater profits.
Managing finances, production, human resources are all necessary skills an entrepreneur should possess. Introducing new production techniques and implementing new strategies are also essential (Saini, 1998). Entrepreneurship is affected by four major factors namely economic development, technological development, culture and education. The economic factors are capital, labor, availability of raw materials, market and infrastructure. Dominance in a particular product in the market influences the entrepreneurship more, than a competitive market.
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