Services and regional development

Abstract

The purpose of this contribution is to discuss what roles the different economic sectors, and in particular services activities (the tertiary sector) play in regional development, understood as growth in production, incomes and employment in weakly developed regions. This question is approached in two ways. The contribution first contains a - primarily theoretical - re-examination of the so-called economic base model, which states that services play a passive role in regional development. The discussion leads to substantial modifications of the model. The second approach is more empirical. It will take as its point of departure the proposition - often heard, but rarely examined - that since service activities are more concentrated in big cities than other activities and in recent decades have shown higher growth rates than other economic activities, it follows that the economic development is now pulled towards big city regions. Examined by way of a statistical analysis in Denmark and France, this proposition could not be verified.