Territorial capital: theory, empirics and critical remarks

1. Annual Meeting of Hungarian Regional Science Association Kaposvár, 21-22 November 2013 Territorial capital: theory, empirics and critical remarks Tóth Balázs István Assistant Lecturer, PhD candidate University of West Hungary Faculty of Economics

2. Introduction: some ‘preconditions’ of TC • Why has the concept of TC become remarkable in recent years? • Increasing complexity of world economy, intensification of globalization • Appreciation of local values, endogenous resources (territorial assets), endogenous growth and path-dependency • Fragile and unequal development (especially in the EU) • Criticism of the cohesion policy of the European Union • Changing concepts of ‘sustainability’ • Diversified ideologies of regional science: • Need for a new interpretation and explanation of regional development • Shift from hard and technical analyses to soft, speculative and critical examinations • Resurgence of supply-oriented approaches

3. The ‘evolution’ of TC Basic theory and model Application of the concept Empirical investigations Territorial cohesion Regional growth, territorial competitiveness Tóth ONLY CONCEPTUALISATION Copus et al. Territorial governance Sarmiento-Mirwardt V. Berkel-Verburg Zonne-veld-Waterhout Rural development Giffinger-Hame-dinger Brasili Camagni, R. Regional Competitiveness: Towards a Concept of Territorial Capital ATTREG Giffinger-Suitner Attractiveness Camagni et al. Camagni-Capello Servillo et al. Empirics (empirics+theory) Coutney et al. Capello et al. Atkinson Brasili et al. European Commission Venturaet al. Capello Pompili-Martinoia Camagni-Capello Finka Caragliu-Nijkamp Giffinger-Hame-dinger Camagni OECD Territorial Outlook Marsh Affuso-Camagni Waterhout Veneri Percucca Zonne-veld-Waterhout Davoudiet al. Casi-Resmini LEADER EO Giffinger Rota Tóth Tóth Kunzmann 1999 2001 2005 2007 2008 2009 2010 2011 2012 2013 Source: own construction

4. Main types of capital in some ‘capital frameworks’: a comparison Source: own construction

5. Measuring TC: a comparison Source: own construction

6. Measuring TC: a comparison Source: own construction

7. Types of Hungarian medium-sized cities based on territorial capital Ózd Kazincbarcika Salgótarján Eger Esztergom Vác Mosonmagyaróvár Hatvan Gyöngyös Dunakeszi Tata Szentendre Sopron Hajdúböszörmény Tatabánya Gödöllő Budaörs Jászberény Vecsés Karcag Pápa Érd Hajdúszoboszló Szombathely Cegléd Gyál Szolnok Szigetszentmiklós Dunaharaszti Ajka Várpalota Törökszentmiklós Veszprém Nagykőrös Dunaújváros Békés Siófok Zalaegerszeg Békéscsaba Keszthely Kiskunfélegyháza Nagykanizsa Szentes Gyula Kaposvár Kiskunhalas Orosháza Szekszárd Hódmezővásárhely Makó Baja Komló Medium-sized cities with considerable capacity in tangible assets and with moderate capacity in intangible assets (6) Developing or territorial capital-deficient medium- sized cities (5) Medium-sized cities with average (moderate) territorial capital (29) Medium-sized cities with considerable territorial capital (5) Hubs of significant territorial capital (7) Source: own calculations

8. Attractiveness of Hungarian sub-regions based on some dimensions of territorial capital 1 2 3 Centroid Sub-regions of lower permanent domestic emigrations Built capital – Human capital + Built capital + Human capital – Function 2 Sub-regions of permanent domestic immigrations Sub-regions of higher permanent domestic emigrations Function 1 Economic capital – Cultural capital – Economic capital + Cultural capital + Source: own calculations

9. Some critical remarks • It is still unclear whether there is a common understanding of TC: • Since OECD (2001) no additional definitions were published • There are problems with the OECD definition: is it a real definition or a list of territorial assets? • TC is not adequate for many criteria of ’capital’: • TC is rather not ’capital’ according to e.g. Elster (1997), Adler-Kwon (1999), Arrow (1999), Solow (1999), Robison et al. (2002) • Not every component of TC is appropriate for statistical analyses: • There is no consensus which dimensions of TC should be measured • There are great differences concerning the applied methods, the indicators and case studies • Is it a static or a dynamic phenomenon?

10. Some critical remarks • It is still unclear whether there are relations between TC and some other terms used in regional economics / regional (local) economic development: • Competitive advantages, regional specialization, regional development, territorial competitiveness, location factors, economies of scale, intelligent specialisation etc. • ‘Territorial capital paradigm’  fundamental research problem: • TC is a new paradigm following the basic meaning of Oxford English Dictionary • TC is not a paradigm following T. Kuhn’s definition (1970) on paradigm • In stead of ‘paradigm’: ‘change in style’ (Hacking 1985), ‘change in the discipline’s core model of reality’ (Lakatos 1978), ‘evolutionary process’ (Popper 1972), ‘self correcting process’ (Sagan 2002) etc. may be more appropriate

11. Some critical remarks • TC concept is still missing from local economic development strategies: • All strategies identify the characteristics of regions well, but do not include them in the development of vision (Banski 2013):  There is a need not only for TC diagnosis, but for TC synthesis as well  Exploration and analysis + formulating vision + defining goals are based on TC

12. Conclusions and proposals • The concept of TC is of great importance but has not been researched in the necessary depthyet • Further scientific research needs to be completed: • Through the concept of TC scientists may get a better picture in relation of the main ideologies and theories in economics and in regional science: TC provides an appropriate analytical framework to study regional economic processes • TC may be appropriate to explain territorial development more precisely: scientists are able to systemize the endogenous factors of territorial development more accurately • The approach of territorial capital can widen the visions of territorial development policies, providing new techniques and methods for strengthening territorial competitiveness in Central and SouthEast Europe, also in Hungary

13. Thank you for your attention! tothbalazsistvan@ktk.nyme.hu