The peripheral municipalities (udkantskommuner) have been the subject of interest for both media and researchers for many years in Denmark, as the peripheral municipalities seem to be worse off on several different parameters. In May 2010 the Economic Council of the Labour Movement published an analysis showing peripheral areas of Denmark performing substantially below the national average across a range of key parameters relating to income, labour market, education, health and demography, which confirmed the ongoing debate on Denmark’s breaking apart. The peripheral regions farthest from Copenhagen were colourfully referred to as The Rotten Banana, stretching from the North West of Jutland to the southern parts and further eastwards across the small islands of the South Funen Archipelago to the isles of Lolland and Falster.
This debate raised a number of important questions concerning the long-term direction of regional development and what – if anything – should be done about it. Are we currently experiencing a self-enhancing process inadvertently leading to concentration of almost all economic activity and nearly all of the population in major urban centres? Or are we seeing more moderate adjustments which may hit hard in some areas without necessarily ushering in any grand transformation of well-established spatial patterns.
In order to address these issues we set out to identify the key drivers underlying the process of spatial restructuring. The regional science and regional studies literatures suggest a number of possible explanations, relating these changes to long waves of economic development, to changing scale economies at various levels informed by the new growth theory, or to the outsourcing of manufacturing jobs, to name but a few key perspectives. For diagnostic purposes we applied a shift-share analysis to the employment and population developments at various levels of the urban hierarchy covering the period 2000-2008, based on data from Statistics Denmark.
Whilst our results do confirm the tendencies underlying the debate, they do not suggest that Denmark is breaking apart. Employment in peripheral municipalities (udkantskommuner) decreased by some 11-12 per cent during this 8-year period – a reduction equivalent to about 0.26 per cent of national employment. Thus, the scope of the process hardly justifies strongly worded statements of the country falling apart. For example, estimates of the average job distance to the nearest geographical centre (based on municipal centroids) suggest that during the 8-year period this distance dropped by around 300 m.
Moreover, the major beneficiaries of regional restructuring do not seem to be the major urban centres, but urban municipalities between 30,000 and 80,000. Even smaller urban municipalities (15-30,000 inhabitants) have seen employment growth slightly above the national average, whereas the Capital area grew slightly less in terms of employment.
What, then, explains these modest changes? For the period as a whole two major factors appear to play a part. By far the most important of these seems to be changes in public sector employment. In peripheral municipalities the direct impact of these changes amounted to a reduction of employment of about 5-6 per cent, or roughly half of the total decrease. As local multiplier effects are bound to account for a substantial proportion of the rest, this seems to be the single most important factor in explaining the changes observed.
Secondly, structural changes away from agricultural and manufacturing employment have hit these areas relatively harder than the more urbanised parts of the country. This latter explanation is consistent with the results of previous research, linking regional change with the emerging ‘New Economy’ or with long waves of economic development more generally.