Debunking the Myth of Localized Agglomerations: The Development of a Regionalized Service Economy in South-East England



The central argument of this paper is that localized clusters of economic activity, or ‘agglomerations’, have been overemphasized in economic geography since the mid-1980s. In particular, such analyses are too manufacturing-biased, and place too much weight on the importance of local supply, market and partnership linkages. We will re-emphasize the service-based nature of growth in the core region of the UK economy, and will explore how a broad band of producer service activity is emerging in the Western Arc, owing largely to common locational logics, including back-office decentralization and the new firm-formation process. Such growth is both stimulated and supported by the high demand levels of the regional economy, but evidence suggests that the linkages of such firms extend well beyond the ‘local’, to cover at least the ‘Greater South-East’. Furthermore, the international element in service growth needs to be recognized, as highlighted by the concentration of US foreign direct investment in the software industry along the M4 corridor. When areas outside the South-East are considered (such as Edinburgh, Tyne and Wear, Cheshire), the evidence appears to support Allen's (1992) notion of a ‘regionalized mode of service growth’ in the South-East.