Significance of the project

► The existing body of knowledge

► Justification of the innovative nature of the research

► Justification of exploring the research issue

► The importance of the project results to the development of a specific area and academic discipline as well as progress in civilization

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The existing body of knowledge

The processes of the social and economic growth tend to diversify in space which leads to a significant variety  in its structure; the scale of this variety often results in slowing down or altogether curbing these processes. This stems from the diversification of growth factors which occur and are at work in economic space to different degrees. Despite the fact, for decades the attempts at explaining growth processes in economy were based on theories where space was by definition homogenous. In the course of an evolution of these theories, the factors indicated as growth-affecting changed.

At first, these were classical factors with the quantitative dimension highlighted: land, capital, labour as presented by A. Smith and D. Ricardo which were later on adapted for the needs of the neo-classical growth models and extended with factors related to technical progress (Solow 1956; Borst and Stein 1964; Richardson 1973). Further on, they evolved towards factors taking into account the new categories of capital and emphasizing their qualitative dimension including human and social capital (Romer 1986, 1994; Lucas 1988) as well as institutional capital (Williamson 1981; Amin 1999).

The interoperation of the impact also changed from the originally prevailing exogenous approach to the now strongly emphasized endogenous approach (Molle and Cappellin 1988; Porter 1990, 2000; Leon-Ledesma and Thirlwall 2002). These considerations were accompanied by the location concepts developed with respect to economy, geography and ultimately regional science. However, the concepts were not included into the mainstream of economics (Marshall 1920; Perroux 1955; Isard 1960; Friedmann and Alonso 1964; Boudeville 1972; Friedmann 1967). The importance of the territory matters was indicated by many authors. However, due to the difficulties of taking  them into consideration in the free competition models and due to the growing importance of the hard-to-measure benefits including proximity viewed in many aspects (not necessarily the geographic aspect), they did not enjoy wide-spread appreciation. The situation changed once the concept of the New Economic Geography was introduced and popularised as it emphasized the need to take into consideration the spatial conditioning in explaining the contemporary processes of social and economic growth leading to significant differences in various territorial systems (Krugman 1991a,b, 1995). On the one hand, the work of P. Krugman and his followers commenced a new stage in explaining economic processes. On the other hand, the criticism of his concepts indicating a re-appraisal of the significance of the business sector accompanied by failure to appreciate the importance of social processes conditioned by territory allowed for wide-scale discussions of the importance of territory capital in the growth processes (Capello 1999; Camagni 1999, 2008). Despite the ongoing discussion of the importance of the place neutral approach and the place based approach in the growth intervention (Reshaping economic... 2009; Barca et al. 2012), the indicated trends affect the re-orientation of programming and implementing the EU regional policy.

The search of the new related approaches stems from the imperfection of the previously employed approaches, especially the relatively poor effectiveness of the growth intervention. Despite the changes, the policy is dominated by the compensatory paradigm which prefers supporting weaker regions, oftentimes by means of simple transfers of financial means earmarked for the development of the infrastructure (Maynou et al. 2014; Rodríguez-Pose and Garcilazo 2015). This justifies the need for evaluating the existing practices and indicating more effective actions affecting and reinforcing growth factors taking into consideration the contemporary challenges to the regional policy (Bachtler and Ferry 2015; Brandsma and Kancs 2015). These challenges stem from the endeavours to increase the effectiveness of the intervention of the regional policy and the changing system of growth factors related to the re-definition of their importance in the face of the crisis globalization. In the endeavour to enhance the effectiveness of the regional policy attention is paid to the implementation of the assumptions of the place-based approach. This approach takes into consideration the specificity of the endogenous resources emerging in territory matters which was widely employed in the reform of the practice of the EU regional policy oriented to enhanced economic, social and territorial coherence (Faludi 2006; Barca 2009; Barca et al. 2012; Partridge et al. 2015).

At present, the place-based approach assumes special importance in the face of globalization of economy where short- and medium-time changes frequently occurring in geographically distant economic systems affect the long-term economic effects in a specific territory (Thissen and Van Oort 2010). The place-based approach is based upon two fundamental approaches. Firstly, it is assumed that each place has its economic,  social, cultural and institutional specificity which (emerging spontaneously and/or by deliberate intervention in the growth factors) creates its territory capital. Secondly, an effective use of the capital necessitates skilful administration of developmental policies. The knowledge of how, where and when the growth factors need to be created or reinforced is a prerequisite for increased effectiveness of developmental intervention (Barca et al. 2012). This leads to a conclusion that, as J. Villaverde (2006, p. 131) put it, „…space plays a significant role in the process of economic growth and convergence…” while the identification of the territorial idiosyncrasies conditions effective growth factors which should not be unified but rather should take into consideration the heterogeneity of endogenous resources (Rodríguez-Pose 2013).

An important trend in the search for a more effective regional policy is also related to the ongoing discussion of the growth policy paradigm, indicating the need for reinforcing the processes of disseminating growth from the cores to the peripheries and withdrawing from  simple concentration of resources in less developed regions. This approach relies on the concept of growth poles (Perroux 1955; Myrdal 1957; Hirschmann 1958; Boudeville 1972; Grzeszczak 1978) and the concept of cores and peripheries (Friedmann and Alonso 1964; Friedmann 1967, 1974) where the growth process is perceived from the point of view of its polarization in the growth areas and diffusion of growth to the surrounding areas (Lasuen 1969; Lasuen and Aranzadi 2002). It is not only about the classical spatial diffusion as presented by Hägerstrand (1952, 1967). and the other authors taking advantage of his experience which is based on the process of disseminating the specific Schumpeter innovations. The impact of the growth poles on the economically weaker areas should be viewed in a context referring to the spillover of the growth effect (Zucker et al. 1998; Zoltan and Sanders 2011). This is a reference to the liberal doctrine in economy assuming liberty in compensating the level of growth without the need of employing state interventionism which could lead to e.g. making the areas surrounding the cores dependent on social support (Richardson 1984; Lambooy 2005). For the process of disseminating growth to take place, the economically weaker areas need to open to exogenous factors while at the same time, endogenous resources are used to the maximum. This may result in a positive impact of a more developed area on its surrounds. This does not need to involve diffusion of innovations but it also may relate to enhanced infrastructure. As a result, the areas surrounding the cores enjoy better access to jobs and higher level services plus the locals’ standard of living improves (Vickerman et al. 1999; Knowles et al. 2008; Komornicki et al. 2010). These changes trigger off growth processes which curb recession and human outflow; this is an indication to treating the economically weaker areas as ascending peripheries (Keeble et al. 1999; Asheim et al. 2001). However, the discussed impact may also result in negative consequences related to e.g. technological dependence, human capital drain and “rinsing” of other growth factors which classifies the surrounding areas as ascending peripheries (Coorado et al. 2009; Kamps et al. 2009). As a result, the contemporary economic models and concepts supporting the prevailing status of the polarized growth theory in explaining the diffusion of developmental processes have been largely criticised both in the economic and political context. However, this does not change the fact that attempts have been made to employ them in practical regional policy. Therefore, A. Kukliński (1987) was right when he stated that contrary to what many illustrious authors claim, the idea of polarized growth cannot be eliminated from the intellectual and institutional framework of the regional policy in the future due to the fact that the growth is an objective feature of reality. Determining growth factors in line with this approach poses a real challenge in the realm of regional practice as well as policy.

The fluctuating conditioning of growth processes resulted in re-defining the importance of growth factors as part of a new growth theory (Romer 1986; Lucas 1988) and the new economic geography (Krugman 1991a, 1995). The specificity of these theories stems from a change in the approach to growth factors (accepting their endogenous nature) including the innovation factor (to a large extent conditioned by the quality of human and social capital and processes like learning by doing and knowledge spillovers) (Farole et al. 2011; Zoltan and Sanders 2011), a broad view of capital (withdrawing from the determining role of material capital) (Coleman 1988; Hilpert 2006; Martinez and Aldrich 2011) and the emergence of new forms of business activity organization in economic space like e.g. growth clusters, innovation centres or economic networks (Porter 1990; Stiglitz 2004; Lambooy 2005; Asheim et al. 2011).

The institutional conditioning gains special importance in affecting growth factors defined in this way. They should be interpreted as (Znamierowski 1947/48; Ostrom 1986; North 1990):

• a group of legal or social norms impacting specific behaviour or activity as well as
• an activity or a number of activities characterised by specific norms .

Typically, the institutional conditioning of the growth factors is related to the second indicated approach and associated with identification of a territory’s body of institutions and its institutionalization stemming from competence and responsibility determined according to law with territorial institutions in mind (Chojnicki 1996). At present, in determining the impact of institutional conditioning on growth factors, emphasis is placed on the first approach following North (1990, p. 477), “…the rules of the game in a society; (and) more formally, (as) the humanly devised constraints that shape human interaction…” and demonstrating the closest relation with the quality of social capital and significantly determining growth processes (Amin 1999; Farole et al. 2011; Rodríguez-Pose 2013; Rodríguez-Pose and Garcilazo 2015).

The new approach to growth factors is widely employed in the concept of the regional policy of endogenous growth (Molle and Cappellin 1988; Martin and Sunley 1998; Barro and Sala-i-Martin 2004; Barquero 2006). Implementation of this policy necessitates systemic intervention better tailored to the specificity of the growth factors in economically weaker areas, especially on the local level due to the limited diversification of their endogenous resources. These activities should be targeted at factors ensuring full use of the endogenous resources and building up functional relations with better developed areas. This may lead to reaching “critical mass” of the endogenous factors in the surrounding areas allowing for absorption of the positive impact of the growth poles and triggering off a process of sustained and independent growth (Martin 1999, 2008; Churski 2008, 2014; Stilianos and Konstantinos 2011). The issue of developing resilience to the consequences of the globalization of crisis phenomena by means of the resilience concept poses a very topical challenge to the contemporary regional policy. The issue has gained in importance as a result of the global  financial crisis and its aftermath in EU countries’ and regions’ economies (Economic Crisis… 2009; The impact of the financial… 2009;  The EU's response… 2009; Communication on a European… 2009). The concept of resilience was introduced to regional growth and regional policy as part of a discussion of the conditioning and the goals of sustainable growth and adapting to climatic changes (Simme and Martin 2009). However, the use of the concept was promptly extended while resilience in general was interpreted as the ability of units/companies or systems/economic systems to return from a state of imbalance or developmental shock caused by various conditions (Drobniak 2014). As part of economic processes, these conditions include economic crisis, dramatically growing advantages of external competitors, unexpected bankruptcy of companies or rapid technological changes (Walker et al. 2006; Foster 2007; Gerst et. al. 2009; Hudson 2010).  They result in re-defining the growth factors and interpretation of their impact in the economic, social and territorial aspect, especially in areas necessitating greater resilience to crisis (including a majority of EU regions). The scope of this re-definition and its consequences have been examined; the results of the analysis are to serve as the basis for recommendations on developing and reinforcing the growth factors answering the latest challenges (Masik and Sagan, 2013; ECR2… 2014; Drobniak 2014). The scope of the recommendations, especially on the intra-regional level of the economically weaker regions, still needs to be extended.

The identification of the growth factors in relation with less developed regions assumed in this project is based on an assumption that the factors are included in the model system of the impact of the present challenges to regional policy. This identification takes into consideration the specificity of the less developed regions of the EU which tend to be significantly dependent on the existing path of social and economic growth (path dependency) (Hassink 2005; Domański et al. 2010; Gwosdz 2014). It is assumed that a complete identification of the growth factors, their contemporary changes and the new opportunities to create and support them should, in line with J.G. Williamson’s (1965) hypothesis, be conducive for reinforcing the inter- and intra-regional divergence as observed especially in areas facing a more rapid economic growth including less developed regions in the EU (Davies and Hallet 2002). This project is an attempt at tackling this task bearing in mind the specificity of the less developed regions of the EU and the regularities on the regional and intra-regional levels. This connects with the ongoing discussion in literature on the subject of the biggest contemporary challenges to the integrated growth policy aimed at effectively enhanced cohesion (Farole et al. 2011; Barca et al. 2012; Capello 2014a,b).

 

Justification of the innovative nature of te research

Research into the growth factors is typically carried out by economists and economic geographers. The achievements of this research may be attributed to two fundamental trends. The first trend refers to the importance of the growth factors in impacting social and economic processes. The other trend is related to the issue of managing growth and the possible use of creating and reinforcing the factors of this process in developmental intervention. As part of the former trend, researchers tend to be most interested in identifying the regularities in social and economic processes leading to regional convergence (Barro and Sala-i-Martin 2004; Begg et al. 2008; Coorado et al. 2009; Copus 2001; Gawlikowska-Hueckel 2003; Gaustella and Timpano 2010; Henley 2005; Kamps et al. 2009; Malaga and Kliber 2007; Martin and Sunley 1998; Michałek 2007; Smętkowski 2013; Tarkowski 2007; Wójcik 2008). In the research into this trend on a sub-regional level an important role is played by analyses of the identification of the growth factors and their contribution to patching up the developmental differences between core areas and the surrounding areas (Jałowiecki 2007; Jewtuchowicz 2004; Korcelli 2008; Markowski and Marszał 2006; Parr 2004; Smętkowski et al. 2008; Śleszyński 2013; Wójcik and Herbst 2011). In the other trend, a majority of articles refers to the use of the growth factors in managing this process in order to mitigate the adverse consequences of polarization and reinforcing not fully used resources (Hryniewicz 2000; Baun and Marek 2008; Churski 2008; Faludi 2006; Gorzelak 2009; Martin and Sunley 2011; Molle 2007; Parteka 2008; Pietrzyk 2006; Szlachta 2005; Tarajkowski and Wojtasiewicz 2008).

Research into the transformation of growth factors changing their arrangement and importance in the face of dynamic economic changes remains an important and not sufficiently explored issue; the research would lead to systematization of the growth factors, operational definition and identification of the measurement methodology and forecast. This absence is particularly acute with reference to less developed regions whose specific endogenous resources do not allow for simple duplication of research conducted in more developed regions. In this context, the scope and goal of this project fully confirm its innovative nature. The evidence includes:

• Systematization and an operational definition of the growth factors taking into consideration the contemporary challenges to regional policy and the specificity of developmental conditions in less developed regions,
• The multi-variant approach to systematizing the factors of social and economic growth taking into consideration the diversified endogenous resources and the exogenous impact conditioning the diverse extent of social and economic growth in space,
• Suggesting a measurement methodology and forecast of the impact of the factors on social and economic growth,
• Identifying the influence of the new challenges to regional policy on the factors of social and economic growth in less developed regions.

 

Justification of exploring the research issue

The factors of social and economic growth interpreted as certain components, features or events taking place in a specific territory (endogenous) or influencing that territory from the outside (exogenous) and resulting in changes to its status i.e. supporting the influence on its social and economic growth are among the most significant contemporary research issues (Churski 2008; Churski and Perdał 2008). The factors’ impact on developmental processes may be either spontaneous or it may result in intentional management (Chojnicki 1999). In the latter approach, they are of interest to regional policy as targeted at determining and reinforcing growth factors. This stems from the fact that a region’s desirable level of the growth factors when their condition and quality have been considered together with the extent of affinity with the area’s specificity is a prerequisite for the desirable social and economic growth. Unfortunately, intervention on the level of regional policy aimed at patching up the differences in growth resulting from its spontaneous polarization in space is not an easy task. The challenge is posed by the selection of the factors which call for intervention in the specific territories so that they ensure the expected and sustained developmental effects with a maximum use of the internal resources. Another problem is the effectiveness of these efforts: its relatively low level in the administered regional policy is an indication that new approaches and instruments are in need. These challenges and problems should be tackled by means of research into growth factors and determination thereof. The research results could enhance the results and increase the impact of the intervention as part of the regional policy and this connects with our project.  

The ever changing social and economic processes and the evolving theoretical approach to regional growth result in re-defining the existing importance of the growth factors and finding new factors. This justifies the need for initiating regular research with the aim of  (1) identifying the most important factors at the moment stimulating social and economic growth in regions and (2) tailoring the intervention measures launched as part of the regional policy to the new conditions. This project connects very closely with these needs. The project’s results will provide insight into the factors which are now mostly determining social and economic growth in the less developed regions of the EU. What is more, the results of this project will be an indication of the targets of the intervention in the realm of the growth factors in order to best embrace the opportunities or to minimalize the threats related to the new challenges to the contemporary regional policy.

The determination and reinforcement of the regional growth factors has a direct impact on the accomplishment of the major goal of the EU regional policy (since 2007 referred to as the cohesion policy). The goal is to enhance cohesion in three dimensions: economic, social and territorial. For many years, the practical intervention of the member states aimed at reconciling the differences in the development of countries and regions revolved around compensation. It refers to the assumption of the convergence theory that less developed areas grow faster and need less expenditure than the economically more robust areas. The poor effectiveness of this approach led to a debate about the need for changing the paradigm of the contemporary regional policy. As part of the discussion, attempts were made to solve the following dilemmas: cohesion vs. competitiveness and equity vs. efficiency (Hübner 2006; Growing unequal… 2008; Barca 2009; Gorzelak 2009; Reshaping Economic... 2009; Regional Development Policies… 2010; Churski 2014). As a result, it was established that cohesion does not necessarily involve reconciliation of differences; it only allows for a degree of diversity approved on the political and social levels (Faludi 2006; Molle 2007). Identification of the new developmental conditions and  their impact on the growth factors has become a major challenge in enhancing cohesion in the EU regions. Bearing in mind the need for considering the specific endogenous resources one should assume that the factors affecting growth are significantly different in the following system: more developed regions – transition regions – less developed regions. This system is the basis for the classification of developmental differences in the UE in the 2014-2020 perspective. It is worth emphasizing that the impact of the new challenges to the regional policy on the factors of social and economic growth in the more developed and more cohesive regions has been well recognised in literature on the subject. On the other hand, the determination and reinforcement of these factors in the less developed regions plagued by numerous growth deficits and thus less cohesive necessitate in-depth research. This justifies the fact of approaching this issue in this project.

 

The importance of the project results to the development of a specific area and academic discipline as well as progress in civilization

What lacks in the Polish and international research is a comprehensive survey of the importance of the new challenges to the regional policy in determining the factors of social and economic growth in the less developed regions. In this project, special attention should be paid to two types of challenges related to (1) the ambition to increase the effectiveness of the intervention of the regional policy and (2) the changing system of the growth factors and a re-definition of their importance in the context of the crisis globalization. The results will contribute to systematizing the knowledge of the importance on the new challenges to the regional policy in determining the growth factors and their impact on the regional and intra-regional levels. What is more, a new classification of the factors will be suggested in the system of regions with diverse levels of development, taking into consideration also the specificity of the less developed regions which prevail in the new EU member states.

The verification of the employed methods and modification thereof will allow for extending the spectrum of econometric tools employed in an analysis of the regional growth processes. Taking advantage of the new knowledge in human social and economic activity will result in a more effective reconciliation of the developmental differences between the core areas and the surrounding areas. This will lead to a higher standard of living of the population  owing to a full use of the developmental opportunities related to the new challenges faced by the regional policy.

The identification of the most significant factors determining regional growth in the less developed regions and putting forward recommendations of determining the factors will result in greater effectiveness in accomplishing the developmental goals for the societies of Europe and Poland as indicated in the Strategy 2020 for Europe (2010) and 2030 for Poland – the Long-term Strategy for the Country’s Development (2009) leading to the expected progress in civilization which will refer to, among other things:

• explaining the contemporary social and economic processes on a regional scale as a research responsibility in the progress in civilization,
• increasing the number of jobs and enhancing work conditions accompanied by better availability of jobs resulting in a higher standard of living of the inhabitants,
• improved effectiveness in spending public funds financing growth intervention,
• reducing the scale of social exclusion especially in the less developed regions.