Putting place first: towards a new vision for UK industrial strategy

Abstract

This paper challenges the longstanding dominance of agglomeration theory in shaping the UK’s approach to industrial and regional strategy. While agglomeration thinking, rooted in urban economics, has played an influential role in government policy for two decades, persistent spatial inequalities, institutional fragmentation and the underperformance of the UK’s largest cities raise serious questions about its suitability as a universal framework for national industrial policy. The paper argues that the UK economy is better understood as comprising three distinct types of firm–place relationships: agglomeration economies, industrial complex economies and social network economies. Using this lens, the paper critiques Labour’s Industrial Strategy White Paper, demonstrating that although it claims to be ‘unashamedly place-based’, it remains largely anchored to an agglomeration-centric conceptual model. The result is a strategy that fails to reflect the diverse economic geographies that characterise the UK. The paper proposes a pluralist framework for industrial strategy that is spatially sensitive, multi-scalar, institutionally grounded, and better capable of supporting the wide range of firm behaviours and regional conditions present across the UK. It concludes with practical recommendations for policymakers seeking to design industrial strategies that better reflect the complex interrelationships among firms, institutions and place.