Regional impacts of economic transition: From manufacturing to service and knowledge based development: Long term trends and recent Danish experiences in the Wind Energy industry

Most mature industrial economies faced the challenge of severe structural changes in the last decades. Traditional manufacturing moved from the metropolitan and central regions to the periphery. Later the value chain in most industries changed toward knowledge intensive and service activities. This tendency has been reinforced by the trend toward globalization and recently by the impacts of the financial crisis. The aim of the paper is to sketch the long term trends of regional and industrial development in Denmark; and to identify the drivers of economic and geographical change in the production system Denmark belongs to. The starting hypothesis is that the long term transition is driven by a combination of domestic and international factors. The first part provides an overview of the Danish economy in an international perspective focusing on structural change (i.e. the relative size of primary, secondary and tertiary activities) and the impacts of the internationalization. The second section provides an analysis of the regional structural change in Denmark with special attention on the impacts of globalization and the changes in the international production system. The main focus is on the fact that the global financial crisis seemingly has been a catalyst of a process of change, with probably irreversible impacts on the geography of economic activities in Denmark. The third part digs deeper into the processes of regional and functional transformation based on a case study of the Danish wind power industry facing fierce global competition and the challenges of international relocation, with heavy regional consequences for employment. Regional impacts in particular in Western Denmark have been significant both with regards to employment and value-added. The functional and competence profile of the industry in Denmark has transformed, reducing the content of physical production. Currently two tendencies are identified; the move from a production to a skill and knowledge based industry integrated in a global value chain, and an increasing importance of construction and service provision for production capacities in offshore locations. Keywords: International interdependence "" regional and structural change "" a new functional division of production "" toward a service based economy