Growth Poles

Growth poles refer to a grouping of firms or an industry that generates expansion in an economy. Economic growth from a lead or propulsive firm or industry induces growth in other firms or sectors of an economy through agglomeration—or positive external—economies. Growth poles are at once a theory of development and a regional development strategy or policy application.

As many in the development planning literature have noted, the origin of the growth pole had little to do with geography per se and certainly not with regional development. Nonetheless, growth poles— and its related term, growth centers—played a major role in regional development policies in the 1950s and 1960s. Across developing countries, growth poles or growth centers were targeted as places to concentrate public investment to promote development and spread it to outlying areas. The principal and most commonly used means was through industrialization strategies. Growth poles were not limited to developing and industrializing countries, however. They were also used to promote development in lagging, or backward, regions in countries such as the United States, France, Japan, and the United Kingdom.

The notion of growth poles originated with the French economist Francois Perroux and the French School of Spatial Economics. In the 1950s, Perroux developed his theory of growth poles—or what he called the pole of development. Perroux built on the work of economists Joseph Schumpeter and John Maynard Keynes and proposed growth poles as nonspatial propulsive forces of economic growth. The propulsive enterprise generated growth in other parts of an economy through its own growth and innovation. The driver was what he called a propulsive unit in the economy—the growth pole. The growth pole could be firms in an industry, such as steel or electronics, or a set of related firms. The growth pole generated rapid growth through innovation and advanced technology applications. This occurred as growth and development spread to related sectors, creating multiplier effects of development through linkages.

Multiplier effects are achieved through increasing scale economies, which lower the costs of production to firms. Linkages can be upstream to suppliers—backward linkages—or downstream to customers—forward linkages. Growth poles develop new linkages with the rest of the economy over time, as well as with other poles. Thus, as the growth pole grows, so do other related firms, and the economy expands. As in the work of Schumpeter, who analyzed the role of entrepre-neurship and innovation in capitalist development, innovation was key for Perroux in the development process.

Perroux was part of a group of regional development theorists writing at the time who understood that economic growth was unbalanced and thus development was an unequal, rather than equilibrating, process. Along with Albert Hirschmann and Gunnar Myrdal, Perroux challenged national equilibrium growth models by observing and attempting to operationalize uneven growth. Myrdal termed this cumulative causation. Growing regions would generate more growth over time, while backward regions would lag further and further over time. John Friedmann developed a further extension of unbalanced regional growth through his core–periphery model, a dualistic model of growth and decline. Here, Friedmann promoted the need for regional policy and planning in those parts of developing countries that were declining or not growing, or what he called the peripheral regions to the country's growing core.

...