Abstract

This paper deals with the economic restructuring phase of a core-periphery system in which it progresses from a resource-based economy to a more knowledge-oriented one. The point of view is general, though the analyses are focused on Finland, its core area and its resource-based peripheral provinces, especially Nonhern Karelia. Development in a spatio-economic system is regulated by external impulses (demand, regional policy, etc.) together with the distinctive features imposed on the economy by its past history. This development can be explained by reference to spatial differences in rationalization phases in various economic sectors, structural and technological properties, and characteristics of the division of labour and the adoption of new technology. The combined effect of these factors leads to spatial differences in economic welfare. The knowledge-based economy is concentrated at the national metropolis level and the diffusion of these core functions outwards from the national core towards the periphery is at present rather slow. The peripheral areas are becoming an industrial periphery in which the transition to a knowledge economy is a selective process because of the many economic and social considerations involved. The conclusions comprise an interpretation of regional development theory in the context of economic restructuring. The outcome is a complex one, reflecting the fact that regional development is a combined product of many structural, sectoral and infrastructural factors in co-operation with changes in demand and the locational preference of firms.

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