On the interpretation of local economic development in the lagging areas: The case of the Southern Great Plain region

Increasing localisation represents one of the most spectacular processes of the economies that develop and transform as a result of globalisation processes: while the (relative) importance of national economies is decreasing, the economic role of regions and cities seems to grow. Global competition has intensified also in space, especially with the growing importance of the knowledge-based economy. Territorial competition, which refers to the competition of regions and cities for scarce resources, global aims and so on, is increasingly prevalent. The modes of improving regional competitiveness and the local economic development strategies are heavily dependent on the type of the given regions. Local and regional economic development strategies are especially important for the new member states of the EU, since between 2007 and 2013 they will receive significant subsidies from the European Union’s regional development funds to improve the competitiveness of their lagging regions. The analysis of this issue calls for clarifying various questions for the less developed regions. What do we mean by regional competitiveness and how can it be described and measured? Do the economic, social and institutional background and the cultural characteristics of a region influence local and regional economic development strategies? Which development strategy of subregions (LAU1) can most significantly improve regional competitiveness in the lagging regions? After reviewing the most important features of territorial competition, present paper provides a detailed analysis of the so-called “pyramidal model” serving as a basis of the improvement of regional competitiveness. On the basis of this model we outline the local economic development ideas aiming to improve the competitiveness of regions with different development levels. This model of regional competitiveness is suitable for the systematization of both regional planning and bottom-up local economic development ideas, consequently it was also applied for the planning of the economic development strategies of the different subregion (nodal region) types of the Southern Great Plain region in Hungary.