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Learning Networks for Regional Development: High Ambitions for Swedish Regions And a Little Help from Ryan Air
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Partnerships and other forms of mixed governance are generally seen as good in its own, since it sidesteps the public-private debate. Phil Cooke and Kevin Morgan see the animateur state as a third way between strong state involvement (France) and the opposite neoliberal policies (the UK; Cooke & Morgan 1998). There are three risks with public-private partnerships for regional development which will be touched upon here. One is simply the risk that energy is wasted on ineffective measures. Rather than tackling the difficult debates on taxes and cut-backs, partnerships offer an easier road for the national government. Not even the contradictions in the structure of public organizations need to be dealt with, since the network structure is added on to whatever organizations already exist. A more fundamental risk is that public-private partnerships become a kind of “Rotary-capitalism”, i.e. that only established interests are included and listened to. Entrepreneurs are by definition more difficult to find and make agreements with. If the aim is to renew business and support the exploita-tion of new technologies it may be a mistake to listen to proponents of old businesses. An alternative to cooperation in partnerships is to set up an economy for making experiments, which would be closer to a Schumpeterian ideal (Eliasson 2003). In this view, entrepreneurs should have plenty of room to experiment. Their energy should be spent on satisfying customers rather than negotiating with organizations that control or subsidize business activities. While cooperation may be good, it may also be a barrier to experimentation. Part of entrepreneurship could be a kind of cluster support, i.e. when banks or industrialists see the opportunities in putting together resources or developing lacking parts of a cluster. Even in a mar-ket context, there is a debate on long-term ownership versus shifting resources to new areas through the use of capital markets, i.e. a German vs an American model (Hall & Soskice 2001). German capitalism has more of strong and patient owners, while the American capitalism seems better at shifting resources around. The first is better at upgrading old business while the latter is better at finding new business (Casper, Lehrer & Soskice 1999). Over the last decade, with the advent of biotech and ICT, it seems that shifting resources around was the more successful way of creating new capacity. A third risk is that partnerships destroy social capital rather than increase it. It has been argued that partnerships have a supportive role, encouraging trust among businesses and with public actors. It is rightfully pointed out that business agents need a climate of trust to make contracts with strangers. An important part of Italian activities for regional development of the south has been to get rid of corruption and establish trust in government (Barca 2002). In Sweden, such measures are generally not needed. Instead, there is a risk that government agencies adopt too much of business-like meth-ods, supporting winners rather than upholding impartial regulation. In the literature on social capital in developing countries, the question is how to go from corruption to honesty (trust) in the relation between citizens and the government. Somehow western countries managed to establish an impartial bureaucracy and a court system. The risk is now that agencies give up their special characteristics and start acting like companies, sliding on a slope towards more of a private-interest government. The logic and values of business and government are different and should perhaps not be mixed (Jacobs 1992).
Alternatives
An evaluation of the new policy needs to make a comparison with reasonable alternatives to part-nerships and public support for clusters. It is generally agreed that a big problem in Sweden is a low rate of business start-ups and SME’s in general. In the partnerships, two of the main activities are
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| | Authors: Niklasson, Lars. |
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Partnerships and other forms of mixed governance are generally seen as good in its own, since it
sidesteps the public-private debate. Phil Cooke and Kevin Morgan see the animateur state as a third
way between strong state involvement (France) and the opposite neoliberal policies (the UK; Cooke
& Morgan 1998).
There are three risks with public-private partnerships for regional development which will be
touched upon here. One is simply the risk that energy is wasted on ineffective measures. Rather
than tackling the difficult debates on taxes and cut-backs, partnerships offer an easier road for the
national government. Not even the contradictions in the structure of public organizations need to be
dealt with, since the network structure is added on to whatever organizations already exist.
A more fundamental risk is that public-private partnerships become a kind of “Rotary-capitalism”,
i.e. that only established interests are included and listened to. Entrepreneurs are by definition more
difficult to find and make agreements with. If the aim is to renew business and support the exploita-
tion of new technologies it may be a mistake to listen to proponents of old businesses.
An alternative to cooperation in partnerships is to set up an economy for making experiments,
which would be closer to a Schumpeterian ideal (Eliasson 2003). In this view, entrepreneurs should
have plenty of room to experiment. Their energy should be spent on satisfying customers rather
than negotiating with organizations that control or subsidize business activities. While cooperation
may be good, it may also be a barrier to experimentation.
Part of entrepreneurship could be a kind of cluster support, i.e. when banks or industrialists see the
opportunities in putting together resources or developing lacking parts of a cluster. Even in a mar-
ket context, there is a debate on long-term ownership versus shifting resources to new areas through
the use of capital markets, i.e. a German vs an American model (Hall & Soskice 2001). German
capitalism has more of strong and patient owners, while the American capitalism seems better at
shifting resources around. The first is better at upgrading old business while the latter is better at
finding new business (Casper, Lehrer & Soskice 1999). Over the last decade, with the advent of
biotech and ICT, it seems that shifting resources around was the more successful way of creating
new capacity.
A third risk is that partnerships destroy social capital rather than increase it. It has been argued that
partnerships have a supportive role, encouraging trust among businesses and with public actors. It is
rightfully pointed out that business agents need a climate of trust to make contracts with strangers.
An important part of Italian activities for regional development of the south has been to get rid of
corruption and establish trust in government (Barca 2002). In Sweden, such measures are generally
not needed. Instead, there is a risk that government agencies adopt too much of business-like meth-
ods, supporting winners rather than upholding impartial regulation.
In the literature on social capital in developing countries, the question is how to go from corruption
to honesty (trust) in the relation between citizens and the government. Somehow western countries
managed to establish an impartial bureaucracy and a court system. The risk is now that agencies
give up their special characteristics and start acting like companies, sliding on a slope towards more
of a private-interest government. The logic and values of business and government are different and
should perhaps not be mixed (Jacobs 1992).
Alternatives
An evaluation of the new policy needs to make a comparison with reasonable alternatives to part-
nerships and public support for clusters. It is generally agreed that a big problem in Sweden is a low
rate of business start-ups and SME’s in general. In the partnerships, two of the main activities are
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