Dematerializing Local Economies: A Case for ad hoc Governance

Abstract

Part of the decentring process that has evolved with the relative empowerment of sub-national actors has permitted the growth of policy networks. This paper explores which type of governance structure is required to affect unemployment and growth rates when the economy comprises workers in dematerialized firms. Governance is found to influence the regional success of a ‘weightless economy’, but not in a manner that necessarily requires precise strata. Instead, as dematerialized firms are composed of potentially highly mobile workers, policies should be geared towards attracting (and keeping) mobile workers (not companies) and hence governance needs to be flexible and ad hoc to meet the locational tastes of such workers. Benefits will then spill over into the locale through increased aggregate demand for tangible goods, thereby reducing local unemployment and stimulating local growth.