Regional development is the process of enhancing economic outcomes, well-being, and future prospects in regions understood as subnational territories. Regional development policy aims to foster the unrealized potential of a region and is normally implemented by government agencies ranging from those that work locally in their country of origin to those that operate on an international scale.
The dominant issues of regional development are how value is created and how to cope with undesirable interregional welfare disparities. The first question is normally framed as a problem of allocative efficiency, while the second one is mainly based on issues of sociopolitical equity and involves identifying the mechanisms and conditions (economic, policy interventions) that promote regional welfare growth.
A common feature of regional development policy is the emphasis on the role of public support systems to provide a favorable economic environment. Noneconomic factors are commonly ignored.
Nonetheless, it is becoming increasingly apparent that a comprehensive theory of regional development requires not only an economic but also a noneconomic approach. It must incorporate purposeful human agency and structural preconditions to understanding the processes of regional technological dynamics.
These processes are driven by interactions between regions and their global networks of supply and demand. The ability of a region to capture value depends on the power relations within these networks, the degree of coordination with other regions, and its capacity to mobilize its specific assets. In addition, issues of distribution are critical to the success of a regional development strategy.
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