GROWTH POLE THEORY BT PERROUX

GROWTH POLE refers to the concentration of highly innovative and technically advanced industries that stimulate economic development in linked businesses and industries. This concept was first introduced by French Economist Francois Perroux in 1950 based on Schumpeterian theory of development and theory of inter industry linkages and industrial interdependence, was further sharpened in following publications, and finally evolved into an idea that came to take on a meaning rather different from the one posited by Perroux. While he had conceived a growth pole to be a focus of economic development in an abstract economic space, it was interpreted by his disciples, particularly Jacques Boudeville, to be a focus of development in geographic space. According to Perroux, “Growth does not appear everywhere and all at once, it appears in points or development poles, with variable intensities, it spreads along diverse channels and with varying terminal effects to the whole of the economy”. It is related to Perroux’s idea of an economic space as a field of forces consisting of centers, “from which centrifugal forces emanate and to which centripetal forces are attracted. Each center being a center of attraction and repulsion, has its proper field which is set in the field of other centers”.

History of the Theory: 

Perroux, a 20th-century French economist, was largely influenced by the eco-political climate around him when he wrote about the concept of the growth pole. At this time, France was in its post-World War II phase of rebuilding itself under the Marshall Plan. Urban areas were the primary centers of economic growth, relying on technology- and innovation-based industries that thrived on primary resources such as iron ore or agricultural products from the surrounding region. These concentrations of industries often affected the economies of geographical areas outside their immediate regions. Also apparent to Perroux was the dominance of colonial centers over geographically dispersed colonized areas.

Basic Assumptions: 

The concept of growth poles and growth centers is based on certain assumption about the real world. 

1. Human activities must cluster together to generate internal and external economics of scale. 

2. Clustering create social problem like congestion, diseconomies of scale and spatial imbalance in social and economic dev. 

3. Policy interventions to generate to generate growth foci in areas. 

Object of this Theory: 

Perroux in his attempt to understand the modern process of economic development, discovered that –

1. Growth does not appear everywhere at the same time. 

2. It manifests itself in points or poles of growth with variable intensities. 

3. It spreads by different channels and with varying terminal effects on the economy as a whole.

 According to Perroux, “The process of economic development is essentially unbalanced and the centers of growth may give birth to other esters or it may become a center of stagnation.

Hypothesis of the Theory: 

The core idea of the growth poles theory is that economic development or growth is not uniform even an entire region, but instead takes place around a specific pole. The pole is often characterized by a key industry around which linked industries developed, mainly through direct and indirect effects. The expansion of key industry imputes the expansion of output, employment, related investments as well as new technologies and new industrial sectors. Because of scale and agglomeration economics near the growth pole regional development is unbalanced Transportation especially transport terminals, can play a significant roles in such a process. The more dependent or related an activates is to transportation, for more likely and strong thing relationship. At a later stage, the emergence of a secondary growth pole is possible. Mainly if a secondary industrial sectors emerges with its own linked industries also emerge. 

Basic types of polarization: 

Growth poles theory thus documents the contribution of polarization to the development of poles as well as peripheries and this theory identifies four basis types of polarization:

 A. Technological and technical – based on the concentration of new technology in the growth pole. 

B. Income – the growth pole contributes to the concentration and the growth of income due to expansion of services and dependence on demand and profit.

 C. Psychological based on the optimistic anticipation of future demand in the propelled region. 

D. Geographical based on the concentration of economic activity in a geographically determined space.

 Contributions of the theory: .

The same author then proposes that in spite of certain drawbacks the theory of growth poles makes several contribution: 

1.It uncovers inequalities in the economy of a country (region) and focuses our attention to the propulsive and propelled units. 

2.It offers a dynamic image of the economy in the country (region) which is based on a general tendency to spatial focus of manufacturing facilities on an interregional level. 

3.It presents a basis for careful decentralization by supporting the creation of new development poles (focused decentralization or decentralized focus). 

Criticism of the theory: The growth pole concept has, however, been criticized on several counts. Some of the important criticisms are as under: 

1. The first problem is the identification and selection of growth pole. If an independent or arbitrary decision is made, the resource base may not be sustainable. 

2. The nodal points and growth poles develop because of certain favorable geographical locations and not because of selection of arbitrary sites. 

3. The problem of threshold – overlapping. 

4. Problem about the sectorial composition of growth pole. 

5. Problem of establishment of regional network of firms. 

6. Problem of social acceptability.

 7. Each of the growth poles may thus lead to new socio-economic and ecological problems. 

8. The selection of growth pole motivated by political consideration may not be sustainable. It has happened in the case of Baruni and Bongaigaon, which have created new socioecological problems. 

9. It is not necessary that growth poles and growth centers may remove the regional inequalities, leading to an overall regional development. The impact of Bhilai and Rourkela can hardly be seen in the surrounding tribal areas of Chhattisgarh and Orissa. 

10. Problem of appropriate span over which to judge success of failure- say 16 to 25 years may be too long in any social order and political system. In fact, an elected government would like to have positive results within four or five years before the commencement of the next election.