Innovative regional milieux, small firms, and regional development: Evidence from Mediterranean France

The purpose of this article is to critically examine key factors that have been involved in the remarkable economic turnaround of Mediterranean France, which until recently was always considered to be a peripheral zone within the national economy. Particular attention is given to the role of noneconomic factors that condition the location choices of households and firms and to the roles of technological innovation, service activities, and small and medium-size enterprises (SMEs) in the regional development process. With increasing vertical disintegration, Mediterranean France has been realizing external economies from the expansion of the entire system of production. SMEs, which are especially prevalent in this region — and which have behavior patterns that follow a logic that is more spatial than sectoral in nature — have contributed significantly to endogenous regional development through their growth as an ensemble. The new regional organizational paradigm transcends older forms of industrialization.