Introduction

Political and academic interest in many Western countries has increasingly focused upon the terms ‘economic competitiveness’ and what, for ease of use I refer to here as the ‘local social fabric’ (social inclusion, social capital and social cohesion). This chapter explores the linkages between competitiveness and this fabric. In so doing the aim is to highlight how each of the four terms are conceptually useful, highlighting their salience for urban areas. It also aims to elucidate how a better understanding of social issues can enrich debate about competitiveness.

An important theme in analysis of competitiveness is ‘clusters’ of competing and collaborating firms. Immediately, this creates an opening for study of how social capital (in its sense of trust ties and shared norms) might underpin inter-firm relations. Other dimensions of the interplay between the social fabric and competitiveness are also of interest and several of these are taken up in the subsequent sections of this chapter.

Section one notes that much is already known about such relationships but stresses that the considerable body of work tends to overlook the inherently exclusive nature of social ties and the issue of wider spatial disparities and policies to overcome these. Section two looks at the importance of social ties to labour markets, notably in relation to highly localised concentrations of firms and supporting institutions. Section three concentrates on work quality (pay and conditions) and egalitarianism, rather than just having/obtaining work (inclusion/capital) and the absence of social unrest (cohesion) per se, and examines whether areas with high productivity firms tend also to be the home for the greatest inequality. The fourth section considers how work-life issues bear on social inclusion, while the penultimate section looks at the role of education in social cohesion. The last section considers the ways in which businesses can benefit from low crime and social order (cohesion) and, to some extent, can seek to influence these through corporate community efforts.

Clusters and business networks

The widespread interest in the gains that can accrue from clustering of particular forms of economic activity has prompted a search for elucidation of the factors that stimulate and sustain such clusters.