Theory and Analysis of Regional Economic Development
Differences in the characteristics of the area mean potential difference, thus requiring policy differences for each region. To demonstrate this potential difference will be established zones of regional economic development.
Regional Economic Development Zone is a regional economic development approach by dividing the area of ​​a region depleted by excellent potential possessed, in one area may consist of two or more zones, and a zone can consist of two or more clusters. Each zone is named according to the excellent potential possessed, as well as giving a name to each cluster.
Regional economic development zone (ZPED) is one solution that can be applied to build the economy of a region for the public welfare in the future. Pattern of economic development with the approach of Regional Economic Development Zone (ZPED), aims to:
1. Build each region according to the potential competitive advantage / core competencies.
2. Creating economic development process more structured, focused and sustainable
3. Provide development opportunities and rural districts as centers of regional economic growth.
This is in line with the general development strategy developed by regional economists today. Experts are very concerned with the idea that economic development is local, so was born the various Local Economic Development Strategies (Local Economic Development / LED).
This strategy is summarized in a variety of theories and analysis related to local economic development. One analysis that is relevant to this strategy is Not Balanced Development Model, proposed by Hirscman:
"If we observe the development process that occurs between two specific time period would seem that the various sectors of economic activity has developed at different rates, which means also that the construction sector is going well despite growing unbalanced. Development of the sector leaders (leading sector) will stimulate the development of other sectors. Similarly, developments in a particular industry will stimulate the development of other industries related to the development of industry experience ".
Unbalanced development model rejected the same in every sector that supports the economic development of a region. This development model requires the concentration of development in the sector of the flagship (leading sector) which in turn will stimulate the development of other sectors.
There is also analysis of core competencies (core competiton). Core competencies can be either goods or services that are the mainstay for the zones / clusters to build its economy. Definition of core competencies by Hamel and Prahalad (1995) are:
"An integrated set of capabilities and resources of a range of peripheral devices as a result of the accumulation process of learning, which will be beneficial to the success of a competing business".