Periphery syndrome - a reinterpretation of regional development theory in a resource periphery

Abstract

A study is made of industrialization and the transition in economic structure as it has affected a remote peripheral region of Finland with a predominantly resource‑based economy over the last twenty years or so. The empirical resultsare used to interpret and develop theory of regional development adequate for describing the transition of this peripheral region from an area dominated by primary‑sector production to one characterized by industry and the service sec­tor. The resource‑based peripheral region concerned is the province of Northern Karelia.

A region‑level core‑periphery system is outlined in which the organization of the economy, the division of labour, performance potential and environmental relations are examined by regional and spatial analysis and resource analysis. A model is developed for evaluating the performance potential of an economy and proposing alternative paths of development.

Development in a periphery is regulated by external impulses (demand, regional policy, etc.) together with the distinctive features imposed on the economy by its past history. This development can be explained by reference to rationaliza­tion in resource processing sectors, profitability difficulties, poor growth propen­sity and special characteristics of the division of labour and the adoption of new technology. The combined effect of these factors, termed here the periphery syn­drome, leads to differences in affluence and in general to regional differentia­tion in the economy. The syndrome is dynamic in nature. The principal problems following the economic transition are shifting away from rationalization in agricul­ture and towards the structure of industry itself. The resource periphery is be­coming an industrial periphery.

The conclusions comprise a set of eight conceptual systems of factors which should be taken into account when studying economic transition and industriali­zation in peripheral regions. These concern development with respect to popula­tion, rationalization, regional policy, the spatial division of labour, spatial cost structures, demand, entrepreneurship and resource and environment factors and the influence of these on regional development in the periphery in question.

The differences in development between the sectors of industry are of sig­nificance for regional development as a whole, and allowance should be made for these in the theory. Where theories of development in resource peripheries tend to represent outcomes of a number of external and internal factors and ones applying to individual sectors, the explanatory model evolved here comprises theo­retical concepts of a number of different types.