Regional development is an incredibly complex phenomenon with numerous and sometimes conflicting dimensions. Various disciplines are involved in the study of this area, including human geographers, economists, sociologists, political scientists and historians. Nevertheless, a number of common tendencies can be discerned.

These are related to the growing awareness that traditional approaches to regional development (based mainly on economic concepts) are unable to deal with the complexity of contemporary processes. For instance, it is often observed that a dominant regional actor, such as a large company or a public sector agency, can dominate the decision-making process in an area by simply controlling the issues that are discussed and decided upon at a particular meeting.

In this context, it has become clear that it is not only necessary to develop new models for understanding regional development but also to revise the concepts and methodologies employed in its analysis. In the light of this, a number of scholars have begun to explore how an intermediate entity between the individual firm and the economy as a whole – which can be labelled in different ways, such as cluster, district or innovation system – might play a key role in regional development processes.

This has been illustrated by the success of projects such as the Tennessee Valley Authority, a federally-owned utility that generates and sells electricity in seven southern US states while at the same time providing flood control, water management, and land management services.