Growth Poles

Growth poles are geographically pinpointed centers of economic intra- and intersectional linkages that generate positive externalities and spillovers, thereby leading to economic growth. Growth poles can exhibit two opposed forces. If top talent, capital, and knowledge are attracted by the growth poles, regional disparities will increase. If a growth pole's mobile production factors trickle down to weaker regions, it may lead to regional equilibrium. In aiming to achieve the latter, growth poles have been applied as a regional development concept.

François Perroux considered the combination of different sectors as functional nonbounded economic spaces that result in interindustrial multiplier effects, bringing about innovation and culminating in nonspatial polarization of the economy. In the middle of the 20th century, scientists such as Albert Hirschman and Gunnar Myrdal described the unequal distribution of growth poles in physical space and went on to establish an explanatory model for unequal regional development. The model considers cumulative growth processes in centers where production factors yield higher returns. Subsequently, peripheral regions will lose the mobile production factors, resulting in a downward spiral. However, after a while, the disadvantages of growth poles (e.g., pollution, high property and labor costs) may dominate the advantages, and the growth effects will spread into the hinterland. The likelihood of such a pattern depends on factors such as traffic infrastructure, level of education, sectoral structures, and cultural or social integration between a growth pole and its periphery.

Growth pole protagonists assume a growth trickle down in hierarchical processes from the metropolitan city to the suburbs and from the suburbs to the periphery. Based on this assumption, many industrial and Third World countries tried to use these effects. Since the 1970s, the main mechanisms were to subsidize production plants and concentrate public infrastructure at specific poles within poorer regions or countries. Difficulties occurred through making the idea operationally tractable and combinable with other regional planning concepts such as the central place theory. For instance, what sectors and infrastructures should be promoted at which location? What is the right size of growth poles, and how decentralized should they be when they are distributed across space?

The diffusion of growth effects into the periphery remains a controversial subject in discussions. To date, no decisive empirical evidence of trickle-down effects has been achieved. However, many regional development and adjustment policies are still based partially on the growth pole idea. The currently favored cluster concept, invented by Michael Porter, focuses on the concentration of interconnected businesses and corresponding institutions in physical space. In contrast to the growth-pole concept, the cluster concept puts the emphasis on existent endogenous regional value chains instead of the exogenous creation of growth poles.