Abstract:

This paper outlines the prospects for the development of sophisticated industry in peripheral and semi-peripheral areas. The debate on this issue usually presents a rigid and bifurcated image of large capital-intensive plants in the periphery and the seemingly unyielding concentration of R&D in central locations. A major claim here is that this image can be softened-up if a more integrative definition of the term ‘technology’ is taken. A methodological approach for assessing the level of technology of the industrial branch is therefore introduced. A multi-dimensional approach is adopted that classifies industries into ‘technological profiles’ based on the different combinations of aspects of technology that they embody. This methodology is applied empirically to a data-set based on sub-branches of Israeli industry at the SIC three-digit level and the main industrial characteristics of the technological profiles are analysed. Having established the industrial consistency of the technological profiles, their spatial behaviour is addressed with a view to identifying those profiles with a tendency to disperse to the national periphery and those with a tendency to concentrate in central areas. Evidence from Israel shows that two types of profile can exist in peripheral areas: operations that use sophisticated production processes and under certain conditions and, at particular scales of activity, small-scale R&D operations not requiring large capital investment. Finally, the industrial characteristics needed to sustain the above process are outlined. In the case of Israel it is shown that those characteristics relating to the inputs (especially quality of labour), rather than those relating to the outputs or spatial linkages of the production process, are likely to act as the main constraints to the development of sophisticated industry in peripheral areas.

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