The rapid growth of the global economy has created new conditions in peripheral regions in old industrialized nations. Having earlier relied on traditional industry as the source of employment, many peripheral regions are today struggling to survive in a completely changed economic landscape, with new conditions for development. The dismantling of trade barriers, the accessibility of new markets for production, and faster and cheaper modes of communication and transportation — the underpinnings of concepts such as globalization and new economy — have combined to change the conditions for development. Based on two case studies, this article analyses the industrial dynamics and the role of policy in the transformation of peripheral regions in advanced nations. Through analysing the development of two Swedish municipalities — once home to vibrant forest-based industrial activities — it is shown that there are certain policy limitations in fundamentally transforming the development paths of peripheral regions.
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