To what extent can the nationstate influence the geographies of economic activity? 1525951 The state refers to a set of institutions that holdssovereignty over a designated territory, exercising a monopoly of legitimateforce and law-making ability (Mackinnon and Cumbers, 2011).
Its role in theeconomy is wide-ranging but often invisible to individual consumers. It shapesthe provisions of goods and services through regulating markets, governingbusiness laws and helping workers to find employment (Mackinnon and Cumbers,2011). However, globalisation and spreadof neo-liberalism have changed its forms and functions over time; highlightingthe state as a ‘dynamic process’ rather than a fixed ‘thing’ or ‘object’ (Peck,2001). This essay will explore the changing role of the state on the economythrough the shift towards a neo-liberal ‘competition state’ and introduction ofa ‘new’ regional policy in the UK. The growth of non-governmental institutionsand transnational corporations will also be discussed in relation to the’hollowing out’ (Jessop, 2002) of the state. Changingrole of state Sincethe 1980’s the state has undergone considerable restructuring, driven byneoliberal reform programmes and the globalization of the economy (Mackinnonand Cumbers, 2011). Neo-liberalism is based on the belief in the virtues ofindividual markets, liberty and private enterprise (Mackinnon and Cumbers,2011), thus has influenced state policies through reductions of public sector andwelfare spending and increasing privatisation and deregulation.
It highlights ashift from the from the post-war Fordist’Keynesian Welfare State’..—to the post-Fordist ‘Schumpeterian WorkfareState’ (Jessop, 2002); focusing onthe national economic development rather than the provision of welfare servicesto its citizens (Mackinnon and Cumbers, 2011). For example, the introduction of’workfare’ initiatives in UK – ‘a system that requires people to work inexchange for welfare benefits and payments’ – (Mackinnon and Cumbers, 2011)echoes this transition and neo-liberal ideas of reducing the reliance ofindividuals on the state by helping people help themselves and promotingentrepreneurship. Inconjunction to this, a neo-liberal ‘competition’ state was promoted, emphasisinginnovation, enterprise and workforce skills (Jessop, 1994) to strengthen theeconomy and is closely aligned with shifts in UK regional policy aimed to addressthe uneven development across the UK- often referred to as the ‘North SouthDivide’.
For example, Keynesian regional policy aimed to direct investment intodepressed regions through a range of incentives and controls (Amin, 1999),following a highly ‘top down’ method of state intervention. However, after deprivationpersisted and hopes of prosperity in the North failed to materialise, a ‘new’regional policy was introduced in 1997 that stimulated growth throughcompetitiveness of the regional economy, using ‘supply-side’ measures (Mackinnonand Cumbers, 2011). For example, the state improved the efficiency of marketsthrough workforce conditions, providing infrastructure, labour training andcapital to promote innovation (Mackinnon and Cumbers, 2011). This new model oflocal and regional development echoes a ‘bottom up’ approach, focusing on theneed to develop local skills and stimulate enterprise by giving the regions ‘ahand up rather than a hand out’ (Mackinnon and Cumbers, 2011). As a result, stateintervention is reduced as planning responsibilities are redistributed to localgovernments, allowing them to take control of their local environment, developlocal solutions to local issues and stimulate economic growth in appropriateways. Under the authority of the coalition government,the creation of ‘Local Enterprise andPartnership (LEPS) Scheme in England 2010’ demonstrates the success of the changein policy responses to the North- South divide; an economic development underpinnedby a ‘local growth’ agenda which aimed at ‘realising every place’s potential’ (HMGovernment, 2010).
It encourages the partnership between local governments,businesses and non-governmental bodies, allowing them to collectively decide on what the priorities should be for investment tohelp the area prosper (HMGovernment, 2010). Thus, the government’s role is reduced to supporting and fundingthe regions, enforcing many LEPs to public claim they are ‘free from centralcontrol’ (Puglias et al, 2015). Currently there are 39 LEPs in the UK, with GreaterManchester as one of the first places to embrace the ‘collective approach toplanning’ (HM Government, 2010) and has since ‘leveraged at least £300 million of private funding’, which will supportcity projects over the next decade.
A success of the scheme is reflectedthrough the Manchester city airport ‘Enterprise zone’ which, through offering ‘business rates discounts, simplified localplanning laws, tax relief and support’ for businesses who locate there, has ledto the ‘Online giant Amazon … confirmed plans to open a new 654,000 sq ftfulfilment centre at Global Logistics (HM Government, 2018). This will bring ‘over1,500 jobs to the region’ (HM Government, 2018), helping to increase wealth intothe area and raise standard of living; demonstrating how enterprise zones canbe seen as a driving force of the local economy. Furthermore, direct flights to China seals the city’s reputation as amajor gateway for Asian businesses (HM government 2018) which will lead tofurther economic development through the encouragement of foreign investors.