As an increasing amount of manufacturing employment has relocated to the Global South, the developed economies of the Global North have sought new ways of competing within the global economy. In part they have done so through the promotion of the so-called ‘knowledge-based economy’ (KBE) constituted by innovations and new markets in high-tech industries like telecommunication, information technology, and the life sciences. A KBE discourse has become a central plank of policy at the national and European levels. This raises a series of questions, however, about the ability of less-favoured regions to compete for knowledge-based activities, given existing conditions of uneven development and the unequal distribution of knowledge assets between regions in the developed economies. In this respect, particularly critical to regional outcomes are the forms of economic coordination and governance that emerge in knowledge-based commodity chains. Engaging with recent debates concerned with global commodity chains, this paper builds on the idea that economic governance is increasingly alliance driven, entailing a diverse set of geographies and trust-based relationships between a variety of organisations that include small innovative firms, large multinational corporations, and national (and subnational) policy actors. These forms of governance open up new opportunities for less-favoured regions, although these continue to be constrained by already existing power relations between regions.
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