Devolution and the territorial politics of foreign direct investment

McKinnon, Danny and Phelps, N.A. (2001) Devolution and the territorial politics of foreign direct investment. Political Geography, 20 (3), 353-379. (doi:10.1016/S0962-6298(00)00068-8).

Abstract

In this paper, we consider the possible effects of devolution on the territorial politics of foreign direct investment (FDI), focusing on two regions in particular: Wales and the North East of England. Informed by recent work on the politics of spatial scale, the paper draws attention to the role of regional actors in supporting processes of globalisation from below whilst also suggesting that regions are produced from above through processes of FDI-led globalisation and state rescaling. We explore the territorial politics of FDI in the UK through the central notion of an Inward Investment Service Class (IISC). This concept enables us to operationalise our ideas of ‘bottom up’ globalisation and ‘top down’ regionalisation by focusing attention on the role of a specific set of economic development interests within the two regions. The paper argues that while the notion of an IISC highlights important relationships within Wales and the North East, it is questionable whether the groups identified actually function as an identifiable coalition. In terms of how devolution might shape approaches to FDI in the context of pre-existing institutional differences between Scotland, Wales and the English regions, we suggest that the prospect of increased inter-regional competition for FDI may be balanced by inter-regional collaboration. In conclusion, the authors stress the need for further research to advance our understanding of how processes of globalisation from below actually operate.

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