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Discussion paper no. 8 - Report meeting Tromso 1995
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MANAGEMENT OF SOCIAL TRANSFORMATIONS - MOST

Discussion Paper Series - No. 8

COPING LOCALLY AND REGIONALLY WITH ECONOMIC, TECHNOLOGICAL AND ENVIRONMENTAL TRANSFORMATIONS

Sub-regional meeting at the University of Tromsø

MARCH 1995

Report prepared by

Svein Jentoft, Nils Aarsæther, and Abraham Hallenstvedt,
University of Tromsø, Tromsø

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Introduction

This paper describes some general social research issues related to what is defined as one of three themes within the broader MOST (Management of Social Transformations) umbrella. This theme in question, "Coping locally and regionally with economic, technological and environmental transformations," was chosen as the focus for a Sub-regional meeting, hosted by the University of Tromsø in March 30-31, 1995.

In this meeting researchers from Nordic countries, Russia and Canada discussed research priorities and strategies for the northern region. An important aim with the meeting was to foster international participation and collaborative research projects across social science disciplines within the MOST framework. A working paper was distributed to the participants in advance. The working paper contained preliminary ideas and suggestions for research, and was discussed in plenary and group sessions during the meeting.

The present paper is revised in accordance with the conclusions that we arrived at. Also, in revising this paper we have integrated ideas and views that were expressed by the participants in their presentations at the meeting. The meeting reached a consensus that the issue of globalization and its impacts on northern peripheral districts should be a main focus of a coordinated research effort.

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Global trends

Increasingly, global economic, technological and environmental forces shape local future, albeit in ambiguous and unpredictable ways. At the regional, community, firm, and household level, these forces provide new constraints and opportunities for economic growth. Yet, they also pose serious threats to cultural values and traditional socio-economic adaptations.

However, globalization is not a deterministic process. Neither is it only defined by external forces. Rather, the future of local communities is shaped through an interplay between what occurs at global and local levels. Thus, analytically, the focus on globalization should be a dialectic one. As Anthony Giddens puts it: "The globalizing tendencies of modernity are simultaneously extensional and intensional - they connect individuals to large-scale systems as part of complex dialectics of change at both local and global poles." In a similar fashion, Eikeland argues that with globalization the focus must not only be on the "locale" but also on the relations and interactions that occur among localities and regions. We believe that this dialectic should be a main focus of the MOST research program for the northern region. Global forces require and evoke response at the local and regional level. Even the most peripheral communities and regions in the north now find themselves in a situation where they must learn to live within a world that has become increasingly global. Isolationism will hardly suffice as a strategy for survival. Before one can hope to find answers to the more applied, policy oriented questions, such as how communities and regions most effectively can relate to the ambiguities of modernity, we must begin empirically by analyzing how communities and regions currently are making out. We expect that there are lessons to be learned from comparing failures and successes, and that a circumpolar, comparative research approach will be the most productive.

Globalization has several effects on communities, such as those identified by Pascal Byè in a MOST working document: First of all globalization produces social change as local economies are absorbed within world capital and commodity markets dominated by multinational companies. Secondly, globalization results in the shattering of the specificity of cultural identity and value systems, partly as a function of international media. A third effect is urbanization and the disturbed balance between man and nature.

These trends can be identified wihin peripheral areas and different cultural settings of the north. While in some places, and at certain periods, globalization offer new employment opportunities and increased social welfare, the more common pattern is one of increasing socio-economic, and ecological imbalance. One effect is the concentration of power, capital and information in "successful" urban regions, coupled with the economic and demographic decline of rural regions. Indeed, many rural communities in the north now find themselves on the brink of extinction as the natural resources they rely on have been exposed to over-use for years. In fisheries, for instance, a fleet of industrial, large scale trawlers operating outside national territorial borders, is largely responsible for a crisis with a destructive effect on coastal communities. Hardly nowhere is this better demonstrated than in the case of Newfoundland, Canada.

However, the impacts on peripheral regions by excessive industrial concentration, computerized communication networks and the economic and cultural dominance of the urban centers are likely to be countered in a variety of ways. Rather than finding peripheral communities as passive recipients, the global challenge will generate a local response. This response may not simply be reactive. It may also involve entrepreneurship. While market saturation resulting from a global flow of cheap products of mass production may prohibit backward regions from becoming economic strongholds on a global scale, new and more localized market niches are likely to appear with opportunities for innovation and growth. Conditions inhibiting or enhancing peripheral communities to fully exploit such opportunities, is an important research topic. Furthermore, communities, social groups or classes may react differently as they operate under complex and diverse institutional constraints. The socio-economic differentiation that may thus result from globalization, is another area for social research.

Notably, globalization is not restricted to the economic sphere only. It also pertains to culture. It affects peoples' identities, self-image, and their sense of belonging. The "global village" is an imagined community, it exists in the minds of people. A MOST research program for the northern region must also have a focus on the symbolic aspects of globalization, and how it is perceived within different social strata and sub-groups. The role that children and young adults play as "change agents" in this respect is a particularly interesting phenomenon.

Globalization is not a synchronous force. It may proceed differently from area to area, due to the relative abundance of natural resources, the standard of communications, the level of education, the existence of trade barriers, and the economic situation in general. Neither is globalization a one-way street. In fact, in some regions of the north trends point in the opposite direction, i.e. from a globally oriented economy to a more localized one. This is best illustrated in the case of Russia, where crisis and privatization have radically changed the focus of industrial production. As Jørgen Ole Bærenholdt points out: "Former centers of fish supply for the large Soviet market based on technologically complex high sea fisheries have been dismantled. Today, Northwestern Russian fisheries has been marginalized into the periphery of raw material suppliers for the economic centers of fish processing and consumption within the European Union."

Regional economies based on fisheries resources have always been very open. In parts of the north, trading linkages to the outside world have existed for generations. Therefore, globalization should not necessarily be considered as a recent trend. In the case of Newfoundland, Sinclair (op.cit) argues:

It is tempting to think of globalization as a late twentieth century process that only recently has incorporated hinterland areas. However valid this characterization may be for some places, it is misleading for rural Newfoundland, where for centuries, survival has necessitated an accommodation with the international economy. Newfoundland's fish production was directed to Europe, the Caribbean and Brazil at various periods and these trade links were essential to provide a base for local subsistence activities that made extensive use of natural resources on land and sea. That fuel, food and shelter were largely generated in the informal economy does not diminish the importance of the global connection prior to the twentieth century. What happened elsewhere condition what happened locally. Nor should we forget that the commercial extractive economy developed beyond fish to include forest products, electric power and various minerals.

While economic globalization is legitimized with respect to increased efficiency of production and optimization of social welfare for the global community as a whole, it also means that economic processes are becoming increasingly abstracted from the concrete social and geographical contexts. In the words of Anthony Giddens (op.cit.), this is the process of disembedding: i.e. a process whereby economic activities are "lifted out" of the local context within which they occur and become reconstructed across spatial boundaries. The effects on peripheral regions of this disembedding process is at best uncertain: There are many examples of ecological disasters, destruction of productive capacity through asset stripping, exposure to international economic crime etc. The prevalence of these phenomena within our region is a matter for empirical research. So also are the less tangible consequences; such as the erosion of social solidarity and traditions of economic cooperation, the weakening of trust and familiarity within social relations that exist within local communities. The loss of such crucial values may destroy the attractiveness of living in peripheral communities. Important also is the negative influence of the investment climate that is so important for economic development.

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Coping strategies

The globalizing economy is not an automatic outcome of a "natural" process, Rather, it is the accumulative result of deliberate choices, by private entrepreneurs, local business enterprises, multi-national corporations, nation states and international organizations. These choices are guided by specific motives and interests, and can be evaluated in terms of overall goal attainment, economic efficiency, distributional effects on social welfare, regional development and the like.

While many of the problems created by globalization for local communities are sufficiently complex so as to require government support at national and even supra-national levels, models of governance based on top-down assumptions are increasingly seen as inadequate. More than ever, the local consequences of globalization call for a participatory and consequential dialogue between local communities and centralized states. For the periphery, conventional macro-economic planning schemes, such as those that are inspired by Keynes, will not suffice. Neither will traditional strategies with emphasis on heavy manufacturing industries. The economic and ecological failures of such investment policies are clearly identifiable in peripheral regions of the north. Also, the "structural adjustment" response, providing basic infrastructure to attract potential new investors to marginal areas in decline, will at best be a necessary condition, but hardly a sufficient one. These responses are typically hierarchical, i.e. implemented from the top down. Also, they often strongly influenced by dominating political ideologies and the relative strength of centrally based actors like business lobbies, trade unions and conservationist organizations. How such external policies and planning initiatives are shaped, how they change over time, and how they affect marginal communities in responding to the global challenges, are questions well suited to a collective research endeavor such as the MOST program.

As pointed of by the Brundtland Commission and the UNCED meeting in Rio, there is a strong case for user-involvement and participatory planning of local communities, non-governmental organizations, and ethnic groups in resource conservation and exploitation. The arguments for popular participation are several: To be socially just, strategies for sustainable development must allow inputs from the local level. Also, to be effective, governance systems must be regarded as legitimate by groups affected. In democratic societies, people are unlikely to support and finance regulatory schemes if their role is strictly defined to be at the receivers end of the regulatory process. Participatory governance models, on the other hand, give local communities a co-responsibility for the design, implementation and enforcement of regulatory systems. Thus, they have the potential of raising the conservationist morale.

However, as Rasmussen et. al. point out, the empowerment of local communities does not eliminate the need for international management schemes "as many of the natural resources of the north as well as contaminants, are transboundary, or, as in the case of many of the living resources, characterized by a dominance of highly migratory stocks." For precisely these reasons the Brundtland commission stressed the necessity of institutions that extend beyond the nation state.

As traditional geo-political barriers are dismantled in the northern hemisphere, a new form of regionalism is being conceived. While still in creation, the Barents region encompassing the northern areas of Norway, Sweden, Finland and Russia is a case in point. A similar development is taking place within the Baltic Sea region. As Bo Svensson argues, "that actors at local and regional level, striving to cooperate across the east-west divide in the Euro-Arctic deserve attention. They are an example of how actors in peripheral areas are searching for new ways to avoid marginalization."

Here, several research questions are relevant to a MOST initiative: What functions may regional cooperation imply? What are the inhibiting factors to collective action across national boundaries, cultural, political and trading barriers? How do local communities adjust to the new possibilities and challenges of the new regionalism? To what extent do a formation of "regional industrial districts" serve as a realistic coping strategy within an inherently unstable global economy? What are the potential economies of scale and scope pertaining to such districts?

Policy formation within the region-state-local community triangle is an interesting new research issue. Can regional support strengthen the role of local communities in the policy process at national levels? As Juha Tolonen argues (see footnote 11):

Regional cooperation may be seen from two different perspectives. It may be understood as implementation of general cooperation on the central (state) level. This way of looking at cooperation makes it rather uninteresting. Regional cooperation may, however, be understood as the primary level where really concrete new cooperation is generated. The state level cooperation is needed mostly to support regional the level.

In face of globalization, community viability is contingent on strategies that fall between the two extremes: total encapsulation and capitulation to exogenous forces. The sustainability of marginal communities requires both defensive and offensive strategies at local, national and regional levels. To some extent, the coping strategies will have to rely on restrictions designed, implemented and enforced at regional (such as within the framework of a Barents region) or national levels (for instance in sectors where a controlled harvest of natural resources is crucial). But effective coping strategies also rely on initiatives from below. For instance, the potentials of global information networks will most likely become a necessary condition for economic survival of peripheral communities. For communities it is there to be used. Some aspects of their socio-economic structure and culture needs special attention and support of government.

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Local level response

Local responses to globalization may arise spontaneously from individuals, households and firms. Efforts may be strictly individual and "privatized", like when people out of necessity or opportunity switch from the formal to the informal labor market. In maritime communities in North Norway and in Atlantic Canada the small-scale fishery has traditionally served as buffer by absorbing labor in times of unemployment. Resource crises and subsequent government restrictions imposed on the fishery have by and large eliminated this role.

Global challenges may also lead to cooperation, networking, and collective action where communities draw upon values of social solidarity and traditions of mutual self-help. In the "global village" traditional cultural values and identities are threatened. There are, however, many examples of communities and ethnic groups that, when put under pressure from the outside world, have become more aware of their cultural heritage, and they have acted to energize their traditional customs. Thus, the effects of globalization may break both ways: Either, the global influence may lead to social differentiation, atomization, and even chaos - as illustrated by the current process of privatization in parts of eastern Europe. Or it may serve as an impetus for community cohesion and cultural continuity through a deliberate social response. The conditions under which one or the other result, is a vital research issue.

How globalization affects the mind-set of individuals, is an interesting research problem. Gjertrud Sæther's observation of rural villages in Russia, the "mir", is a case in point. In fact, "mir" has several meanings: "the village commune", "the world" and "peace". This suggests that local people are capable of simultaneously possessing alternative images of their communities and of themselves. Thus, there is not necessarily a conflict between tradition and modernity. Sæther contends that in these villages people live in different time-worlds, the modern world introduced to them through the modernization and industrialization of agriculture and in a world of pre-industrial mentalities.

The local answer to globalization can also be institutional. Coping strategies may be founded on existing political or communal structures such as local government, neighborhood committees, women's organizations, and church communities. The role of organizations and institutions, be they government or not, should be investigated in order to fully understand their potential both as agents of change and as anchors of stability and coherence. In his paper, Martti Siisiäinen raises a series of questions pertaining the role of voluntary organizations. He argues that "social movements and voluntary associations can be seen as counsellors of the political system as they mediate between the values and interests of local citizens and the system represented by political elites." Then, how exactly is this mediating role performed? To what extent is it a one-way process? Siisiäinen thinks of the political process as one through which an interest has to pass three filters in order to be realized: The first filter is the formation of a collective consensus; the second pertains to the selection of participants who can speak on behalf of others; the third filter exists within the voluntary organizations, in their bureaucratic procedures and their often oligarchic traits. How local concerns and demands are blocked or find their way through these filters, should be determined by social research.

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Civil society

It is to be expected that a mixture of bottom-up and top-down strategies are employed within all the northern peripheral regions, but that the relative importance of the two will vary from one area to an other. Therefore, rather than stressing analytically a division between the local/ regional and the central levels of governance, we should, as pointed out by Giddens, develop concepts that highlight the dialectics of change at both local and global poles. In this process institutions and policies initiated at national level often serve as a mediator between developments that occur at the local and the global scene.

By themselves, bottom-up strategies are likely to be ineffective in addressing the global challenges. However, as part of an integrated "co-management" approach they have a better chance, if the process of policy formation is receptive to local needs and concerns, allowing participation of affected communities, and if it is fit to handle issues of a larger scale.

The main difference between a top-down and bottom-up planning approach is their unequal emphasis on the ratio between standardization and hierarchy on the one hand and cultural specificity and local-level autonomy on the other. The key to economically effective and socially just development in peripheral regions is mutual respect and partnership between the central and the local levels of government. Important also is that community self-reliance and strategies for empowerment may well be initiated from the top down as an effort to facilitate a planning process which ensures involvement from below. Without the consent, encouragement and support of central government, local participation is likely to be less effective.

The negative impacts of large scale social transformations on peripheral regions may be mitigated if the population affected has a tradition of organizing for common problem-solving. The processes of functional specialization and social differentiation that result from modernization and globalization may have reduced, if not eroded entirely, the capacity of local communities for collective action. Under these circumstances, bodies such as municipal authorities, regional organizations sponsored by government or voluntarily by private groups, churches, trade unions, industry associations etc. may take on new roles provided that they can sort out the conflicting interests and world views that emerge from the globalizing process.

Because of a more firm institutional backing, local government agencies are therefore often more forceful agents of change than regional and community voluntary organizations. On the other hand, public agencies may be bureaucratized or in control of a local elite, and thus unable to adapt to new conditions, for instance a more participatory constituency. Public policy formation at municipal and regional levels is a research issue, including the role that voluntary organizations and user-groups play in the process. The hypothesis is that there is an untapped potential for voluntary organizations as partners in the provision of welfare services and as job creators. However, the role they play is likely to be strongly influenced, sometimes restricted, by government involvement in local affairs. Therefore, the interaction between the central and local level, triggered by coping strategies initiated at both poles, is an interesting research topic.

Two issues in institutional design are of particular interest to both social researchers and policy-makers:

* Inclusion: How should individuals and households that do not hold organization membership and people that do not participate regularly in elections be incorporated in the political process. How can women be involved on an equal footing with men? Those that are politically poor are likely to be the first to lose their jobs when unprofitable primary and secondary industries close down. According to Byè, "..the introduction of new forms of solidarity between individuals, often in the non-commercial sphere" (op.cit. p.11) is essential. What conditions facilitate such solidarity to surface, is an important research issue.

* Political arenas: Effective public participation is often hampered by the lack of arenas that allow people to come forward with their concerns in the political process. As described by Leena Suopajärvi, one consequence is the loss of confidence in the political system as such.

How can such arenas be established? What can be done locally, and how can government agencies be creative in this respect?

Political institutions must be shaped in order to expedite a truly "communicative" process, which allow peripheral communities to participate effectively and fairly in the political process. This is a perspective from which existing institutional forms should be analyzed. A great number of research questions pertaining to political institutions should be addressed: Can models of regional development be effectively transferred from one country to another and from one peripheral district to another? Must support to, or reconstruction of, civil society processes always be rooted in the particular history and context of each region or locality? What are the degrees of freedom here? Under which circumstances can civil society institutions be productive within community structures that are not egalitarian? How can government institutions be made less bureaucratic and more flexible? How can the conditions for entrepreneurship and effective and legitimate socio-political leadership be strengthened? Which measures would make government less reactive and more proactive in community survival within a global economy without acquiring a paternalistic role vis-avis peripheral communities?

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Networking as a coping strategy

It has been shown that small businesses by adopting a networking strategy may become highly competitive in global markets. Coined as "flexible specialization" (a development that has been documented within "The Third Italy") is of special interest. The flexible specialization model provides an alternative to the "Fordist" version of modernization. Both models seek resilience towards an unstable environment. But while the former, by employing small batch production, intermediate technology and artisan traditions, is seeking resilience through rapid adaptation, the latter strives to be robust by the use of large scale, standardized mass-production. Whereas the Fordist approach is abstracted from the local environment, flexible specialization exhausts all the benefits of being closely rooted in the community. By itself, the flexible specialization model is now being globalized as a coping strategy of industries and communities alike. To what extent a similar trend is prevalent in peripheral communities of the north, is well worth looking into. In other words, has the slogan "Think globally and act locally!" yet been adopted and put into effect? What impacts have it made on community sustainability?

An important factor in the success of flexible specialization as a coping strategy is the full exploitation of all the advantages that the new telecommunication and information technology is offering. With an increasing tempo this technology is transforming the nature of information exchange within and between organizations at all levels: The business enterprise is affected both in its internal and external relations. Transactions between consumers and producers and between the public and the government is radically changed. Interest organizations now have a new tool for establishing a direct, instant and continual contact with counterparts abroad.

Peripheral communities that were previously shielded from the pressure of the international information industry are now becoming deeply and extensively connected to the outside world through global communication networks. If effectively utilized they could become and integrated part of a local coping strategy for peripheral communities in face of globalization. For instance, this new technology could be employed as part of "distance educational program" that will enable local inhabitants to get access to new information without having to go away, even while working in their private home. This may change the latent role that the educational system has played in the past, namely as "a door-opener" to the national job market. When students had to move out of their community to study, more than often they did not return to settle. That the new information technology may facilitate competence building in peripheral areas is indeed a promising prospect, that should not go unnoticed by MOST.

What the future will bring in the area of telecommunication is hard to envision. At present (beginning of 1995) the increase of Internet users estimated at 1 million a month, and within five year the total number of users is expected to reach 100 million. There are those, like Alvin Toffler ("The Future Shock"), who describe the development as a new industrial revolution, while others believe it is too early to tell. Nevertheless, major changes are expected. Vladimir Putilov predicts a dramatic increase in the flow of information between east and west now as the new technology are being rapidly adopted in Russian north. These are processes which we believe should be at the forefront of the MOST research program within our region. Again, there are ambiguities and dilemmas to be addressed:

* Communication policies: Actual and potential impacts on peripheral communities of technology such as the European Global System for Mobile Communications, Electronic mail and Internet should be researched. If there is a case for government intervention, what actions could and should governments take, for instance in controlling and promoting the adoption process so that also peripheral areas may benefit for the new technology?

* Decentralized centralization: Communities that are linked up with these systems will beyond doubt be in a much better competitive position than those that are not. What makes communities capable of exploiting the new technology and what this require of material and human resources, is a research issue. Without serious technological constraints, global centers of communication and information can be established anywhere, even in peripheral areas. To what extent do we see this happen in our region, and what are the lessons to be learned here?

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Research priorities

Our region is undergoing a process of dramatic social change: Peripheral communities are becoming exposed to a world of increasing scale. In the years to come, marginal regions must learn to operate more forcefully in global markets, to relate to new international regimes of free trade, and to exploit the opportunities of the information technology revolution. This learning process is an important research issue by itself.

Whatever the impacts of globalization will be, one prediction is rather certain: It will produce a more complex system of linkages within and between regions, and central and local levels. The essence of globalization is both spatial and synergetic. By spreading geographically, social relations are formed (within and across organizational levels) that extend regional and national boundaries.

A MOST research program on coping strategies should be flexible concerning the unit of analysis. Studies should be carried out at the micro level in terms of case-studies, preferably comparative and cross-national. It should also emphasize the macro level, for instance pertaining to national policies and institutions, and have a special focus on settlement structure, demographic change, industrial organization, and the support systems that are established to encourage economic and cultural sustainability within peripheral regions. When experiments and innovations in regional development have been undertaken, their successes or failures should be analyzed. In most instances must such experiments - an interesting exception is described by Jørgen Amdan in the case of Norway - fit within a cultural and institutional framework that may very well have a decisive influence on the process as well as the outcome.

A special focus should be on industries that are based on the exploitation of natural resources that are common property. Because of its importance for regional development in countries on the North-Atlantic rim, the fishery is a particularly relevant case. The fact that many of the fish stocks are shared by several countries of the north, makes the industry well suited for comparative research.

Åge Mariussen (op.cit) reminds us that the household is an important unit of analysis and that we must reconsider its significance: "The household lies at the heart of the transformation of institutional structures", for instance relating to the reproduction of labor force, gender issues, generational succession. The household plays a key role in the coping strategies of every-day life. Also, "in the process of fragmentation and decay, the household level is an important stand," he contends.

This paper summarizes a series of research issues and themes that were proposed and discussed at the MOST meeting hosted by the University of Tromsø in May 1995. However, these ideas remain to be developed into full-fledged research proposals, and we suggest that financial support should be provided for this purpose.

In its initial phase, we hold that the MOST research program for the northern region should concentrate on two areas, one pertaining to industrial development, the other to civil society. We believe there should be a separate project for each area. Analytically, however, we think that there should be considerable overlaps. As discussed in length above, the overall theme in both areas should be the spatial and synergistic impacts of globalization.

We argue that both areas should be studied along similar dimensions. Which particular dimensions to investigate must be determined in the planning process. However, we suggest the following:

A) Policy formation: How are regional issues defined and addressed? How is the regional policy formation process organized, for instance pertaining to democratic participation?

B) Institutions: What are the impacts on peripheral regions of regulatory systems, for instance pertaining to resource exploitation and trade? What support systems exist and what are their impacts on regional development?

C) Information technology: How is the revolution of communication technology affecting the two sectors? How does it affect communication across spatial and cultural boundaries?

We firmly believe that a comparative research approach is particularly useful in this research endeavor. By itself the theme of globalization speaks for such a strategy. Undoubtedly, also there is much to be learned from comparing systems in different countries. Research teams should have members from several countries, and preferably be interdisciplinary. The budget should allow each team to meet at least twice to prepare their proposal, and to coordinate the two project set-ups.

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