ROLE OF PARTNERSHIP IN A LOCAL ECONOMY.

Role of Partnership in a Local Economy



Role of Partnership in a Local Economy

Introduction

Since the mid-seventies advanced economies have experienced severe structural changes. In most countries there has been a significant shift from the industrial towards the service sector. At the same time, in manufacturing, there was a shift from labour and capital intensive industries towards skill and knowledge intensive ones. Along with these sectoral and industrial changes were significant spatial changes that resulted in a new spatial pattern of economic activities: the decline of old industrial centres and the emergence of new ones. This change has resulted in a loss of employment encompassed with a loss of population in many "old" industrial areas that were unable to cope with the decline of their leading industries (Moon & Willoughby, 1988).

Central and Eastern European economies and cities entered the process of restructuring later. They had to wait for political changes and the abandonment of old political and economic systems. As latecomers to the world market, they have found themselves in a situation that is very hard to deal with. They missed the right moment, and now they have to restructure their economies under the uncertain conditions of transition from a socialist to a market economy and the pressure of very firm competition from already restructured advanced economies.

Since they have just started to build a new political, economic and institutional system, the state and cities lack resources to deal with complex problems, which have technological, ecological, regional, economical, social and political dimensions. In this period of transition the problems of industrial restructuring have become very acute.

Traditional industries have suffered closures and downsizing with the resulting loss of employment. New development is mainly concentrated in few regions, while all other parts are experiencing high unemployment, poverty and out-migration of many workers to find employment elsewhere since these regions have been unable to cope with the decline of their leading industries (McKinsey, 1994). Rural areas have been heavily affected as well and many migrated to urban centres where they have at least a hope of finding some source of earnings. When such a situation of fearsome competition for jobs, housing and life-chances develops within local communities, people easily resort to nationalism and ethnic mobilisation, together with the process of exclusion and segregation, physical and social that accompanies this development.

This difficult situation in which the communities have found themselves is not only due to political, social and economic changes in South-Eastern Europe, but also due to changes in the world economy. Crises, decreasing production, instability, uncertainty, and increasing unemployment have become common problems. For some time, economic development has not been a phenomenon that stays within the borders of one national economy. It has strong international connection, because of the impact of the world market on the national economy and vice-versa. In addition, due to globalisation (Maude & Beer, 2000 : 24), regions and localities across the globe are entering into new ...