Practice and potential for the future of territorial pacts

Paper for the conference “Promoting co-operative territorial economy to combat poverty and social exclusion” Brusssels, 23rd of November 2010

Karl Birkhölzer, novembre 2010

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Résumé :

Restructuring local economies has become an increasing need in the follow-up of economic crises as well as economic polarisation together with social segregation processes all over Europe, and social enterprises play an increasing role in tackling these problems.

Although local economic development seems to be nothing new, because it must have always existed, the issue was just until recently not on the political agenda nor adequately recognised in traditional economic thinking. More or less there existed only two approaches: Microeconomics focus on the

economic performance of the single enterprise, while macroeconomic approaches focus on the national economy and increasingly on the economy at a world wide level. In this view the single enterprise interacts directly with the national or the world economy more or less without any relationship to intermediate entities like neighbourhoods, communities, localities or regions. Although this might sound strange again, scientific efforts especially designed for the economic performance of neighbourhoods, communities, localities or regions were not seen as of any importance or necessity.