Growth pole theory derives from the work of English economist William Petty (1623-1687) who was fascinated by the high growth observed in London during that period.

French economist François Perroux (1950) is generally credited with formalizing and elaborating on the concept.

It generally refers to the grouping of industries around a central core that are able to impact growth for them as well as that of the surrounding area.

In its initial avatar, growth pole theory did not incorporate geographical concentration (in fact Perroux specifically denied the possibility of extending the growth pole concept to include geographical concentration).

The geographical aspects of growth poles (or as sometimes called – growth centers) are now considered to be the most important facet of growth pole theory.

But despite the first formalization of the idea in 1949, there is as yet little consensus, on specifically what growth poles mean.

This lack of consensus on its definition is a significant

weakness of growth pole related policy. This has contributed to significant confusion on growth poles and as a result the debate on regional and industrial development initiatives such as clusters, and growth poles.

Are they the same, complements, or are they substitutes?

As noted by Debroy (2006) ‘the notion of growth poles would identify a growth pole as an industry or perhaps a group of firms within an industry. At an extreme, a growth pole might be a single firm or it might be a group of industries.’

Can a manufacturing cluster be a growth pole? Perhaps yes. Can a city be a growth pole? Also yes. Can a collection of villages be made into a growth pole by providing urban amenities? Also yes, provided they do start growing.

So could Special economic Zones (SEZs).

Assignment 3 (20 marks) for 3 DDPN ONLY!

In group of 4 students (5 groups!), select one of the following SEZ (special economic zone) and describe the background and development strategies of those region and how the regional planning could potentially function as growth pole to change the region in future. ECER NCER Iskandar Malaysia SCORE SDC

Submission date: Monday, first week of study leave.

From the various writings on growth poles and growth centres, the basic economics concepts and their geographical developments can be identified:

a. The concept of leading industries b. The concept of polarisation c. The concept of spread effects

The concept of leading industries: Leading industries/propulsive firms – located at the centre

of growth poles, belonging to leading industries which dominate other economic units.

There may be just one single dominant propulsive firm or a core of them forming an industrial complex. LEGOLAND in Iskandar Malaysia Petroleum processing complex at Paka Terengganu.

The original geographical location of such industries in certain focal points in a region may be due to several factors: a. Localisation of natural resources (water/shelter/fuel) b. Localisation of more man-made advantages

(communications or existing service-based central places with advantages of infrastructure and labour supply)

In reality, the growth points are often grafted on to the existing framework of central places.

The rapid growth of the leading industries includes the polarisation of other economic units into the pole of growth.

Implicit in this process of polarisation are the various agglomeration economies (internal and external).

This economic polarisation could lead to geographical polarisation with the flow of resources to and the concentration of economic activity at a limited number of centres within a region.

Even when the original centres of such locations disappears, they will often continue to prosper due to the presence of the agglomeration economies.

Three types of agglomeration economies can be identified:

1. Economies internal to the firm.

These are the lower average production costs resulting from an increased rate of output. Such large scale production allows technical economies (job specialisation, use of ‘flow-line’ rather than ‘batch’ processes) FIRM

Three types of agglomeration economies can be identified:

2. Economies external to the firm but internal to the industry

These are the reduction in cost per unit of output to the firm as the industry expands at a particular location. Arise from the close locational proximity of linked firms, and include the development of a large and skilled labour pool, the easy interchange of materials and products, availability of R&D centre to all firms, etc.

FIRM

Skilled labour

Materials for product

R&D centre

Three types of agglomeration economies can be identified:

3. Economies external to the industry but internal to the urban area

In time the dynamic propulsive qualities of the growth pole radiate outwards into the surrounding space.

These ‘trickle down’ effect or ‘spread’ effects are particularly attractive to the regional planner and have contributed much to the recent popularity of the theory as a policy tool.

Kg Melayu Lima Kedai , Kg Melayu Kangkar Pulai ( & Kg. Tradisi-Melayu, Kampung Baru/New Village yang tersepit dalam arus pembangunan projek-projek mega dan ‘new modern development’). Pekan Gelang Patah (Pekan Lama bercampur dengan pembangunan baru – menanti redevelopment, upgrading & rehabilitation – infill & brownfield development )

Setia Eco-Garden – High-class & Modern living community. Leisure Farm Housing Estate (High Class Residential Area, Konsep ‘international living’, Gated and guarded community) Nusa Jaya (New Township, Pusat Pentadbiran Baru – ‘a world in one city’, Legoland, Academic city, Regionaldevelopment corridor,Incentives Zones, Metropolis, medical centres, hotels, office buildings and hypermarkets).

Bukit Indah - Tesco, Jusco, Giants Shopping Hypermarket. Hotel and big restaurant, - Taman Rekreasi Bukit Indah, business activities Taman Perling - Uda Utama (Suburban Mix Development – strategic location – property speculation) Kg Telok Serdang(Penempatan Tradisi/Sementara – stress of amenities)

Perkampungan Kempas (Perkampungan Rezab Melayu - ) Bandar Dato’ Onn (Bandar Baru). Pembangunan sekitar Tebrau - Perumahan, Shopping Hypermarket, Hospital (Suburban Mix Development) Lebuhraya Senai-Desaru(Highway di Pinggir Bandar). Provision of Mega Infrastructure... The privatization of infrastructure development and Mega-Projects....and 'unbundling' of infrastructural development.

Growth pole theory recognised the transport links to move the goods and people.

Transport factor is important in its own right in the development and spatial structure of regions.

Transport is wide ranging – road, rail, air and sea elements.

Regional planning and development – concern largely with the impact of transport developments on spatial accessibility.

Inter-region and intra-region + improve time-space convergence

Growth pole theory has been adapted as a tool in regional planning.

The central idea of the growth poles theory is that economic development, or growth, is not uniform over an entire region, but instead takes place around a specific pole (or cluster). This pole is often characterized by core (key) industries around which linked industries develop, mainly through direct and indirect effects. Core industries can involve a wide variety of sectors such as automotive, aeronautical, agribusiness, electronics, steel, petrochemical, etc. Direct effects imply the core industry purchasing goods and services from its suppliers (upstream linked industries), or providing goods and services to its customers (downstream linked industries). Indirect effects can involve the demand for goods and services by people employed by the core and linked industries supporting the development and expansion of economic activities such as retail.

The expansion of the core industry implies the expansion of output, employment, related investments, as well as new technologies and new industrial sectors. Because of scale and agglomeration economies near the growth pole, regional development is unbalanced. Transportation, especially transport terminals, can play a significant role in such a process. The more dependent or related an activity is to transportation, the more likely and strong this relationship. At a later stage, the emergence of secondary growth poles is possible, mainly if a secondary industrial sector emerges with its own linked industries, contributing the regional economic diversity. Global supply chains have challenged several dimensions of the growth poles theory since growth and linkages generated by a core industry could concern activities located elsewhere.