Regional development is a term used to describe the growth and innovation of private business and public sector agencies within a given region. It is the result of a combination of economic, social, cultural, political, and geographic factors that shape the region. In a broad sense, it is the context for a range of socioeconomic issues and challenges that have to do with the selection and formulation of regional policies.
Regional developments are often ascribed to the fact that activities cluster (agglomerate) in a certain spatial unit due to their benefits offered by less competition, lower transport costs and an opportunity for economies of scale and scope based on the exploitation of specific local assets. These assets are a mixture of human, technological, and institutional resources.
These ideas have been incorporated in various ways in regional development theory, especially in the influential strands of evolutionary economic geography and regional innovation systems. It is important to emphasize that the process of agglomeration has significant noneconomic dimensions, and a strong emphasis on interfirm linkages has been put forward in both strands of research.
In a broad sense, the concept of regional development can be seen as a means of tackling the large welfare disparities that occur between regions and nations. It is widely accepted that such differences persist for long periods of time and that it takes decades, or even longer, to eliminate them. Another dimension of this debate concerns the ability of regions to cope with a wide range of economic disruptions and stresses, including natural disasters, climate change, workforce changes, and declines in key industries.
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