The global financial crisis of 2007–2008 revealed longer term systemic problems in global capitalism, two of the most prominent being the slowdown in the underlying trend in productivity growth and a rise in economic and spatial inequalities, in many advanced economies. The COVID-19 pandemic looks set to further amplify these problems. This open access paper introduces an issue of CJRES (Cambridge Journal of Regions, Economy and Society), entitled ‘Rethinking the political economy of place: challenges of productivity and inclusion’.
Slowdown in productivity and widening of economic and spatial inequalities
The paper d iscusses the scale of the productivity slowdown and of the widening inequalities that have emerged, particularly with regard to their spatial dimension. That is, how the uneven and slow development of productivity and rise in inequalities have played out across and within regions and cities.It also briefly considers underlying factors of these trends, including financialisation / financial globalisation, the diminishing role of organised labour, and the impact of changing industrial composition particularly as it relates to the rise of the high-tech sectors. These factors play a key role in the segmentation of the labour market, favouring workers who play a key role in financialisation, and driving the increasing polarisation within societies according to skill. The paper subsequently examines in what ways the slowdown in productivity and widening of economic and spatial inequalities, may be interrelated, and questions the notion of any efficiency-equity trade-off.
‘Inclusive growth’ agenda
Furthermore, the paper considers whether the ‘inclusive growth’ agenda can potentially reconcile the two ambitions of improving productivity performance and lessening inequalities, reflecting on what inclusive growth could mean, and what it could imply in terms of policy. Thus far, it appears that an inclusive growth agenda has only gained some traction on subnational levels, which seems to reflect — at least in part — attempts by cities and regions to address gaps in policy left by national governments.