Industries,Skills,and Human Capital: How Does Regional Size Affect Uneven Development?

Abstract

This paper addresses how the composition of industry structures, skills, and human capital is related to regional development in peripheral and central locations. We do this by means of ordinary least squares models to analyse the relationship between growth in purchasing power and employment growth between 2001 and 2008 as well as a selection of variables constructed via register data of the total population in Sweden. The analysis demonstrates an evident spatial division of postindustrial development that larger regions benefit relatively more from than smaller regions do. The empirical findings indicate that a transition towards more knowledge-intensive sectors and a higher educated labour force has the strongest impact on development in the largest Swedish regions, while a transition from manual skills towards more creative skills shows a positive relationship only with development in medium-sized regions. Consequently, the paper argues that the recent appraisal of the knowledge-based economy benefits mainly the largest urban regions, meaning that regional size is an important parameter when discussing trajectories of regional development and the adaption to contemporary economic development paths.