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Paradiplomacy, knowledge regions and the consolidation of “Soft Power”

Miguel Santos Neves

11

PARADIPLOMACY, KNOWLEDGE REGIONS AND THE CONSOLIDATION

OF SOFT POWER

Miguel Santos Neves

Introduction

The increasing complexity of the international system is particularly illustrated by the

heter

ogeneity of players and the growing influence of non-state actors as well as by the

existence of a system of multilayered and diffused governance, where there is

coexistence and interplay between supranational, regional, national and sub-national

levels, not the monopoly of the global level, leading to a considerable ambiguity in the

international system, namely about the exact location of authority, its fragmentation

and the management of overlapping jurisdictions and rules.

The major structural changes societies and the international system are experiencing

are determined not only by globalization but also by two other distinct processes which

are intertwined with it: the emergence of the “knowledge-based society” and the

“network society”. The processes of globalization and of building the knowledge society

originated two different phenomena which are apparently contradictory. Globalization is

behind the development of macro-regionalism insofar as macro-regions enable the

exploration of scale economies, the rationalization of production systems and

transaction costs and the development of transparent competition rules. In contrast the

knowledge-based society has worked in a different direction introducing the dimension

of "localization" and stimulating the development of micro-regionalism. There is

sufficient evidence to support the argument that the evolution of the world economy is

not simply characterised by globalization but by “glocalization”, a more complex

process involving simultaneously globalization and localization.

Knowledge regions, strongly anchored in multi-actor knowledge networks and a

proactive paradiplomatic international action, have emerged as relevant players in the

international system and the real competitors in the global economy. The paper is

structured in three parts. The first part discusses the main factors behind the

emergence of the micro knowledge regions in the context of the process of

glocalisation. The second part analyses the features and dynamics of knowledge

regions both the old ones in advanced countries but also the new ones in the emerging

economic powers, China, Brazil and India. The third part addresses the phenomenon of

paradiplomacy and its strong linkages with knowledge regions and discusses the

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Vol. 1, n.º 1 (Autumn 2010), pp. 10-28

Paradiplomacy, knowledge regions and the consolidation of “Soft Power”

Miguel Santos Neves

12

implications of the new knowledge society paradigm in terms of changes in the

philosophy and practice of foreign policy.

Globalisation, knowledge society and the emergence of knowledge

regions

The international system has been experiencing not only a process of globalisation but

more precisely a dual process of “globalisation cum localisation” which some authors

have named glocalization or fragmegration

1

. The joint effect of this globalisation-

local

isation process, with their points of complementarity and their contradictions, is

inducing a major paradigm shift in societal structures, in the way the economy and

markets function and states operate and how citizens relate to each other and to the

state

Globalisation has been a widely discussed topic but still remains a rather ambiguous

concept with at least four different meanings to it

2

. The first perspective sees

globalisation as internationalisation, stressing the intensification of interaction and

increasing interdependence between countries/states. A second view equates

globalization with liberalization, implying the elimination of barriers to the free flow of

goods, capital and people, the reduction of state restrictions and deregulation. Thirdly,

globalization has also been regarded as universalisation, implying the creation of global

norms and values (by states) and gradual reduction of cultural differences. Finally,

globalisation can also be seen as deterritorialisation, reflecting the fact the territory, a

fundamental basis of organisation of westphalian sovereign states, lost relevance as

transnational networks and new forms of social organisation that transcend territorial

borders emerged and non-state actors became increasingly influential at the

international level. Unlike the others, the last meaning implies a qualitative change and

distances itself from the state-centric approach insofar it underlines the new role and

influence of non-state actors.

Localisation is associated with the emergence of knowledge-based economies and

societies which are those where knowledge became the determinant factor of

innovative production (new products, production processes and organizational

methods), and innovation the key ingredient behind competitiveness. The most

valuable aspect in the production of knowledge is the investment not in physical capital

but above all in intangible assets: human capital, knowledge capital and social capital.

In the knowledge society social activities are particularly geared towards the

production, the distribution and effective use of knowledge which allows for the

capacity to create and innovate new ideas, thoughts, processes and products and to

translate them into economic value and wealth. On the other hand, the knowledge

society is also a learning society where there is a strong priority attached to learning

and “learning how to learn” which conditions the sustainability of the process.

In stressing the centrality of the process of knowledge creation and diffusion it is

important to point out not only that there are different types of knowledge but also that

1

See James Rosenau (2002). “Governance in a new Global Order”. In David Held and McGrew (eds.)

Gover

ning Globalization: Power, Authority and Global Governance, Cambridge Polity Press: 70-86.

2

Dominique Moisi, IFRI (2001). “The Knowledge-based society – beyond IT revolution”, paper presented at

the Annual EU-Japan Journalists Conference: Reacting to the knowledge-based society: European and

Japanese views, Dublin, 7-9 March.

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Paradiplomacy, knowledge regions and the consolidation of “Soft Power”

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some have a higher strategic value than others. An important distinction to be made

between two fundamental types of knowledge: (i) Coded knowledge (know-what and

know-why) which can be equated with information and easily acceded through

databases, books or lectures; (ii) Tacit knowledge (know-how and know-who) which is

more difficult to have access to insofar it presupposes practical experience and social

practice, in particular the know-who which is socially embedded knowledge that can not

easily be transferred through formal channels.

“Tacit Knowledge” is the most decisive and strategic kind of knowledge because it is

crucial to interpret, select and integrate coded knowledge, as well as to learn new skills

and forget old ones. Moreover, with the advances in information technologies the

increasingly cheap and easy access to vast information makes tacit knowledge even

more relevant because it is scarcer and selection and interpretation of coded knowledge

becomes paramount.

The creation and diffusion of tacit knowledge, unlike coded knowledge, requires a social

context, face-to-face interaction and trust and it is unlikely to be transferred on an

anonymous base. This is where the “network society” factor has to be accounted for, in

the sense that the social networks that involve a diversity of actors and contribute to

the upgrading of the level of social capital

3

– i.e. the capacity members of a society

have

to develop mutual trust and cooperate to achieve common goals - is a

fundamental condition for the creation of tacit knowledge. Tacit knowledge is

considered to be only transferable among actors who share norms and values and

possess a high level of social capital.

The transition to the knowledge society/economy has become a key issue in the

strategic thinking of many societies and states and is gradually becoming a priority in

the political agenda of governments. Thus far, this trend involves mainly “strong

states,” developed countries or emerging new powers, which already have a strong

position in the global economy. The analysis of the EU Lisbon Strategy and the updated

“Europe 2020: a strategy for smart, sustainable and inclusive growth”; Japan’s

“Innovation 25” strategy, the US “American Competitiveness Initiative”; Brazil’s

Programa “Três Tempos”; China’s “Harmonious Socialist Strategy” already made

operational in the 11

th

Five-Year Plan and updated in the 12

th

Five-Year Plan (2011-

2015)

currently in its final process of approval; or India’s 11

th

Five-Year Plan, shows

that, since the late 1990s, these actors have engaged in the formulation and

implementation of strategies to facilitate a transition to a knowledge society/economy

4

.

The relationship between the two processes of globalization and knowledge-society is

rather complex. Globalization is at the same time undermining localisation, insofar

instantaneous transfer of information regardless of location undercut traditional

competitive factors such as proximity to inputs and markets, and reinforcing

localisation as this ability to source from anywhere becomes open to everyone and

therefore ceases to be an advantage. In this context the “location paradox” emerges in

the sense that “…the most enduring competitive advantages in a global economy seem

3

In the sense of the concept developed by Putnam, see Making Democracy Work: Civic Traditions in

Modern Italy, Princeton, Princeton University Press, 1993.

4

Neves, Miguel (2007). “National Experiences in Managing the transitions towards a knowledge

Society/Economy - Same Dreams, Different Beds”. In Estratégia, nº 22-23, IEEI.

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Paradiplomacy, knowledge regions and the consolidation of “Soft Power”

Miguel Santos Neves

14

to be local” as argued by Porter

5

. Moreover, the environmental costs of globalisation

are now increasingly at stake. The pressing standards of corporate environmental

responsibility and the concerns over climate change and the reduction of CO2

emissions, questions the sustainability of the fragmentation of globalized production

processes pressing for location near the consumer markets in order to minimise

emissions thus providing new advantages to localisation.

Michael Enright

6

argues that this is only an apparent paradox as this twin process tends

to be essentially complementary insofar the process of localisation of competitive

advantages of firms is a necessary condition to compete in the global market. In other

words, firms have first to consolidate their knowledge creation and innovation

capabilities in their local/regional clusters and networks, as innovation is today the

main driving force behind competitiveness, in order to meet the new challenges of

globalisation.

However, I would argue that there is not only complementarity and convergence; there

is also divergence, tension and contradictory effects between the two at different

levels.

Firstly, while globalisation reduces the relevance of the territory in the old way, the

knowledge society grants a new strategic significance to the territory. Given the

centrality of tacit knowledge and the fact its creation requires direct social interaction

on a territorial base, we can then understand how the knowledge society and the

network society processes have contributed for the territory to regain importance but in

a new perspective: not because it is controlled by the state or is the basis for the

exercise of sovereignty, but because of the social activity that takes place there and the

density of the knowledge networks. Knowledge creation became a territorialized

phenomenon, insofar it enables national/regional actors to develop trust, form

networks, produce common norms and values, develop partnerships and engage in

mutual learning.

From this perspective, the knowledge society and economy contradicts the opposite

trend of deterritorialisation set in motion by globalisation. As a consequence the local

and regional levels gained a new strategic value, because it is the optimal dimension

for the creation and operation of the knowledge networks that produce and diffuse tacit

knowledge.

Secondly, globalisation generates a concentration of economic power, setting in motion

a complex process of mergers and acquisitions which have been taking place in many

sectors, while the knowledge society tends to generate greater dispersion of power and

assets and to stimulate co-operation. This concentration of economic power and the

formation of major conglomerates in the financial sector is clearly one of the structural

causes behind the current financial and economic crisis insofar it created the syndrome

of “too big to fail” and weakened the capacity of states to carry out effective regulation

and moderate market abuses and anti-social behaviour of conglomerates.

At the same

time this same process weakened the glocalisation process insofar global banks bought

or pushed out of the market smaller regional/local banks with closer ties with the local

5

Michael Porter (2000). “Location, Competition and Economic Development: Local Clusters in a Global

Economy“. In Economic Development Quarterly, 14: 15-34.

6

Enright, OECD (2001). Enhancing SME competitiveness. The OECD Bologna Ministerial Conference, Paris,

Background paper for workshop 2.

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economy and institutions: as a consequence credit became less accessible to SMEs

clusters and knowledge networks

7

.

Thirdly, in terms of policy responses, globalisation requires from the point of view of

regulation the fight against monopolies / dominant positions and strict enforcement of

competition rules while the knowledge society/economy implies a logic of greater

cooperation between firms, universities, research centres, local governments, NGOs

and other partners that integrate the knowledge networks and greater tolerance with

regard to practices that from a formal perspective could be seen as violating

competition rules. In other words, the new paradigm of the knowledge society has far

reaching institutional and regulatory implications insofar it requires a flexibilisation of

rules in several areas notably in competition and intellectual property rights in order to

remove major obstacles to knowledge diffusion.

Fourthly, globalisation is behind the development of macro-regionalism and regional

integration while the knowledge society is favouring an opposite trend of micro-

regionalism, thus facilitating the development of two different kinds of regionalism with

two different logics.

The development of this new micro-regionalism is anchored on, and driven by the

emergence of the knowledge regions, a new actor both in terms of knowledge creation

and innovation and of governance whose strategic relevance derives from the very

nature of tacit knowledge production and dissemination as will be discussed below.

The new strategic relevance of the knowledge regions is associated with different

factors.

To begin with, the necessity to introduce new forms of Governance within states that

induced decentralisation and devolution of powers to sub-national governments. The

systemic effects of globalisation caused the weakening of the Westephalian state,

although with considerable differences between strong and weak states, as a result of

the incapacity of central bureaucracies to deal effectively with a whole new range of

complex issues, the growing power of non-state actors and the emergence of new

sources of loyalty and identity that compete with nationality.

Secondly, the knowledge regions emerged as the systemic mediators between the local

and the global managing contradictions and addressing the new multi-level governance

challenges. To a large extent they are the real competitors in the global economy and

acquired a deep understanding about its logic and dynamics. One can argue that it is

regions rather than countries that are competing in the global economy. Conversely at

the local level they function both as the catalysts of the organisation of local actors’

strategies and actions to pursue their interests in the global economy and as the safety

net to cushion negative effects of globalisation, thus contributing to social stability.

Thirdly, the relevance of the knowledge regions derives also from their strategic role in

strengthening Global Governance insofar they operate already on the basis of multi-

actor knowledge networks whose expertise is required to respond to the complex

regulation of very technical issues. This puts knowledge regions in a privileged position

to provide inputs to global rule-making. Similarly, they have a crucial role to play as far

as rule-implementation and adaptation to local conditions and specificities are

7

See Stiglitz, Joseph (2006). Making Globalization Work, Penguin Books.

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concerned, thus being a strategic player in ensuring both the voluntary compliance to

and enforcement of global rules.

Knowledge regions: features and dynamics

The concept of Knowledge Regions is relatively recent and there is not yet a consensus

about its precise contents. However, it is clear that the concept refers to micro-regions,

territorial units which are parts of a State, that operate as regional innovation systems

according to the new logic of the knowledge economy and society. Although the focus

has been more on national knowledge regions I would argue that transborder regions

involving parts of different states cutting across political boundaries can also constitute

knowledge regions (transborder). In spite of the fluidity of the concept, I would argue

that a comparative analysis suggests that knowledge regions display some fundamental

common features which go far beyond economic aspects to include sociological,

governance and political dimensions. The most fundamental features include the

following aspects:

(i) High level of human capital as a result of a consistent level of investment,

especially in education and training, with important consequences not only in

terms of productivity but also in terms of acquisition of new skills, innovation

capacity and learning capabilities.

(ii) High investment in R&D, public and private, and efficiency of the system

translated in good performance as far as outputs are concerned, particularly

patents.

(iii) Possession of a core group of knowledge-intensive industries and/or knowledge

services which play a strategic role in securing innovation and competitiveness: IT

and computer manufacturing (computer and office equipment, electronic

components, communication equipment); Biotechnology and chemical sectors

(pharmaceuticals, drugs, chemical products); Automotive and high-technology

mechanical engineering (motor vehicles and transport equipment, machine tools

and equipment); Instrumentation and electrical machinery (precision and optical

equipment, electrical transmission equipment, lighting and wiring equipment);

High-technology services (software and computer related services,

telecommunications, research, consultancy, development and testing service).

(iv) High level of social capital, implying good levels of cooperation and trust between

members of the community, which favours the development of dense regional

networks between regional knowledge actors, enhancing the capacity to produce

and diffuse tacit knowledge.

(v) Communities characterised by a strong multicultural trait, associated with the

presence of a significant foreign community from a variety of countries and

cultures, also because as dynamic innovation poles they attract talents from other

countries and regions, which facilitates a better knowledge about other cultures

and visions of the world.

(vi) New forms of governance, less hierarchical and more participatory, which put

great emphasis on active public-private partnerships, devolution of powers to local

governments and new forms of articulation between different levels of

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Paradiplomacy, knowledge regions and the consolidation of “Soft Power”

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17

government and policies aimed at facilitating entrepreneurship in both public and

private sectors.

(vii) High international profile in many cases associated with a reasonable level of

international participation based on a proactive paradiplomacy in areas of low

politics carried out by sub-national governments in close co-ordination with the

private sector and civil society organisations.

This illustrates the complex, multidimensional and far-reaching structural changes that

underpin the emergence of knowledge regions. It should be noted that these traits are

tendencies and therefore they are combined in very different proportions in different

regions, some might even be absent or not fully consolidated in specific regions.

Moreover, despite the commonalities mentioned above there is not a homogeneous

model of knowledge region; there are obviously many points of divergence and

different degrees of maturity between different experiences.

Comparative analysis of Knowledge Regions has been carried out by Robert Huggins

8

who h

as been producing the World Knowledge Competitiveness Index. This Index is an

overall benchmark of the knowledge capacity, capability and sustainability of the best

performing and most dynamic regions in the global economy.

The World Knowledge Competitiveness Index 2008 provides the most recent analysis of

the performance of the leading knowledge regions in the world. It compares 145

regions - 63 from North America (USA and Canada), 54 from Europe and 28 from Asia

and Oceania – and is headed by the San José region in the US followed by other US

regions. In the top 10 there are two non-US regions Stockholm (6

th

) the best

performing European region and Tokyo (9

th

) the best performing Asian region. The top

50 rank is dominated by US regions but includes 13 European regions and 9 Asian

regions. At the bottom of the ranking we find the Chinese and Indian regions as well as

regions from Eastern Europe. It is interesting to note that all the most developed

Chinese coastal regions are now integrated in the group.

Comparing the 2008 results with the 2005 Index it is possible to conclude that while

the leading knowledge centres are still in the US, the American predominance is less

overwhelming insofar there is a clear improvement in the performance of the

knowledge centres outside the US, namely in the EU and Japan which place 13 regions

(7 in 2005) and 7 regions (1 in 2005) respectively in the top 50 knowledge regions.

Moreover, there are few US regions that have improved their position since 2005 which

suggests that the considerable gap between US regions and European and Asian

regions is narrowing.

In developed countries the most competitive knowledge regions have consolidated their

competitive advantages and lead the process of innovation. They are clearly the

engines of their respective economies and the key competitors in the global market. In

the US the San José-Sunnyvale-Santa Clara region, which includes Silicon Valley, is for

some time the leading region supported in very high rates of investment in education

and R&D (such as NASA) with a strong basis in knowledge–intensive sectors in

particular the IT, high-tech services and instrumentation and electrical machinery

sectors. The top US knowledge regions group include also Boston-Cambridge endowed

8

Robert Huggins, Hiro Izushi, Will Davies and Luo Shougui (2008). World Knowledge Competitiveness

Index 2008, Centre for International Competitiveness, Cardiff School of Management, University of Wales

Institute, UK.

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18

with a high quality terciary education sector with 8 strong research universities in

particular Harvard and the MIT; San Francisco-Oakland-Fremont; Hartford and Seattle-

Tacoma-Bellevue.

In Europe the strongest knowledge region is Stockholm (Sweden) which ranks 6 in the

ranking of the world knowledge competitiveness index. It has a highly educated

population - 39% has terciary education and 45% secondary education – and a

diversified economic structure although with a particular specialisation in knowledge-

intensive services and in some high-tech industrial activity: Information

Technologies/Electronics; Software/Internet; Health and Biotechnology; Transport and

Logistics.

Other leading knowledge regions in Europe include West, South and Ostra

Mellansverige in Sweden; West, East, North and South regions in the Netherlands;

Pohjois-Suomi, Etela-Suomi and Lansi-Suomi in Finland; Ile de France (Paris region)

and Centre-Est in France; Luxembourg; Denmark; Norway; Badden-Wurttemberg ,

Bayern, Hamburg and Bremen in Germany; Eastern, South East and South West in the

UK; North West and Lombardia in Italy; Noroeste/Catalunya and Madrid in Spain.

In Japan knowledge regions have also improved their performance in recent years.

Tokyo is the leading Japanese region (ranks 9 in the 2008 WKCI), possessing a strong

high-tech services sector and high rates of patents, followed by Shiga, strong in specific

knowledge sectors instrumentation and electric engineering and IT and computer

manufacturing, Kanagawa, Toyama, Osaka and Tochigi regions.

While the role of these knowledge regions in securing the leadership of advanced

economies in the innovation process is well known, the role new knowledge regions

have been playing in developing economies that have emerged recently as economic

powers is often overlooked and less known. The main argument is that one of the key

factors behind the success of the new emerging economic powers, in particular China,

Brazil and India, is the gradual consolidation of knowledge regions inside these

countries which have performed the roles of the main engines of economic growth,

centres of innovation and the fundamental bridges to the global economy. The other

side of the coin has been the asymmetric nature of their development processes.

In China, there are three crucial knowledge regions with different profiles: the “Bohai

Rim region” (Beijing, Tianjin, parts of Shandong and Liaoning); the “Yangtze River

Delta” with the leading centre in Shanghai and involving also 7 cities in Zhejiang and 8

cities in Jiangsu provinces; the “Pearl River Delta”, involving Guangdong province and

the ties with Hong Kong and Macao. The 9 coastal provinces involved in these 3 leading

poles of the Chinese economy account for nearly 2/3 of China’s GDP (62%) and GDP

per capita is 1.7 times higher than the national average; more than 75% of China

exports. It is important to note that each region has its own development model and its

specific strong points

9

.

The B

ohai Rim region has been characterized as a government driven model with the

most intensive R&D facilities (42 of the 91 institutes of the Chinese Academy of Science

9

See Robert Huggins, Hiro Izushi, Will Davies and Luo Shougui, World

Knowledge Competitiveness Index

2008, Centre for International Competitiveness, Cardiff School of Management, University of Wales

Institute, UK: 34-46; On PRD and YRD comparative analysis see Chen Xiangming (2006). Regionalizing

the Global – local Economic Nexus: a tale of two regions in China. Great Cities Institute, Working Paper,

University of Illianois Chicago, March.

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Miguel Santos Neves

19

are located here) as well as the top universities (Tsinghua University and Peking

University) and nearly 25% of university students and 30% of R&D researchers are

located in the region which accounts for 34% of national R&D expenditure. This is

mainly explained by intensive investment by the Chinese government in the last two

decades.

In contrast the Yangtze River Delta is labelled as a city-network driven model by which

the new knowledge and technology absorbed by Shanghai from its own industrial

dynamism and strong presence of foreign multinationals is then diffused from Shanghai

to smaller cities around it, in particular Nanjing, Suzhou and Hangzhou where specific

clusters are maturing. It has strong knowledge intensive sectors in particular the

automobile industry, the IT sector and chemicals and machinery as well as more dense

knowledge networks in particular strong ties between firms and universities and high

levels of technological commercialization.

Finally, the Pearl River Delta region is qualified as a FDI drive

n model as it has been an

important recipient of foreign investment accounting for 20% of FDI stock in China,

especially from and through Hong Kong, and the main basis of China exports as the

region is the origin of nearly 1/3 of Chinese exports although the share has declined in

recent years. Although the science and technology basis, the education indicators and

the density of knowledge workers are not strong points, the region benefits from the

intensive presence of foreign investors which are associated with some knowledge

transfer through workers and managers, the formation of local SMEs clusters and the

proximity of an international centre like Hong Kong with knowledge-intensive services.

In India three main knowledge regions are behind the emergence of India as a global

economic power : (i) Mumbai, capital of the state of Maharashtra, is the financial

capital of India and a region with strong knowledge intensive sectors - IT, Health sector

and audiovisual namely the film industry of Bollywood – responsible for 40% of India

exports; (ii) Hyderabad, capital of the state of Andhra Pradesh with a series of relevant

sectors IT, pharmaceuticals, biotechnology and high-tech services sectors, is a main

exporter of software products ; (iii) Bangalore, capital of the state of Karnataka, is

known as the Indian Silicon Valley reflecting the fact it is the leading IT sector

producer and exporter in India accounting for 34% of India total exports

10

of IT

produ

cts, and is also an important biotechnology centre.

In Brazil the leading knowledge region is the state of São Paulo which has set up

several knowledge networks associated with the programme “Arranjos Produtivos

Locais” which involves SMEs, universities, research centres, local governments aimed at

building strong ties between the different players and fostering innovation

11

. The state

is already the powerhouse of the Brazilian economy accounting for 34% of total GDP in

2007

12

(down from 37% in 1995) and for 43% of Brazil’s industrial output and

possesses a group of knowledge-intensive sectors namely chemical industry,

machinery, medical instruments, auto industry, biotechnology, pharmaceutical, IT and

nanotechnology sectors.

10

See Invest in India “17 billion software exports for India’s IT state, http:

//investmoneyinindia.com

(2.08.10)

11

Secretaria do Desenvolvimento, Governo de São Paulo, www.desenvolvimento.sp.gov.br/drt/apls

(2.08.2010)

12

Fundação Sistema Estadual Análise de Dados e IBGE, www.seade.gov.br (2.08.2010)

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20

One of the important characteristics of knowledge regions is their increasing direct

participation in the international system and their ability to act more or less

autonomously in the international stage and develop paradiplomacy actions that can be

parallel or complementary to actions developed by national governments.

Paradiplomacy and foreign policy in the knowledge era

A crucial issue in terms of prospective analysis is the implications of the new knowledge

socie

ty paradigm for structural changes in foreign policy taking the emergence of

knowledge regions into account. There are interesting developments which suggest

potential fundamental changes to the goals, nature and instruments of foreign policy in

a global knowledge society.

The first development is the new relevance of paradiplomacy developed by sub-national

governments, in particular by the governments of knowledge regions. These are

increasingly active in the international arena, mainly in areas of low politics (trade,

investment, science and technology, culture, and education), trying to project their

specific interests according to a dual logic: on the one hand, a process “from the inside

out” reflecting the fact that local governments go out to promote local interests and

reduce the risks of international threats; on the other, a process “from the outside in”

whereby non-central governments become the focus of attention and suffer pressures

from both foreign governments and non-state actors as they realise that influence at

the central level is no longer sufficient to pursue their aims. This is a potential area of

conflict with the traditional diplomacy of central governments

13

.

The development of paradiplomacy is a growing trend in the international system

clearly illustrated by the old and more developed knowledge regions as well as by the

new ones in the emerging countries. Paradiplomacy first entered the international

system through the British Dominions (Canada, South Africa, Australia) in the context

of the British Empire in the 1920s. For the first time the international activity of non-

sovereign governments, although seen as a deviant behaviour, was tolerated by the

international community and the Dominions gained autonomy in negotiating

international trade agreements and other economic matters. This set a precedent. Hong

Kong was later on one of the pioneers of modern paradiplomacy as a result of a

structural conflict of interests between the colonial power, Britain, and the colony on

trade matters leading London to informally accept since the late 1950s Hong Kong´s

autonomy and capacity to negotiate directly trade agreements with foreign states. The

Hong Kong SAR still has an active paradiplomacy based on the action of the network of

HK Trade Offices (Geneva, Brussels, Washington, San Francisco, New York, Toronto,

Tokyo, Sydney, Singapore, London) at the bilateral level and HK`s participation in

multilateral organisations, particularly in WTO. The Canadian Province of Quebec was

another case in point since the early 60s when it developed close ties and signed

bilateral agreements directly with France on cultural matters which generated conflicts

with the Federal government.

13

Brian Hocking (1993). Localizing foreign policy – non-central governments and multilayered diplomacy,

London, St. Martin’s Press.

Michelmann in Hans Michelmann, and Soldatos (ed) Federalism and international relations – the role of

subnational units, Clarendon Press, 1990. Duchacek, uses the word paradiplomacy in “Perforated

sovereignties: towards a typology of new actors in international relations” in Michelmann (ed.) Federalism

and International Relations: 1-33.

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Since the late 1980s, also facilitated by the strategic decompression after the end of

the Cold War, the expansion of the paradiplomacy of sub-national governments has

been a silent but fundamental change in the international system and the way in which

states act internationally. The most developed regions became proactive in the

international stage, mainly motivated by economic reasons, as illustrated by various

cases. The German Lander such as Badden-Wurttemberg and Bavaria developed a

certain degree of external autonomy, establishing networks of external representation

offices in several countries in all continents. Bavaria for example has built since the

mid-1990s a network of external representations in 22 countries in Asia (China, India,

Japan, Vietnam), Africa (South Africa), America (Brazil, Mexico, Canada, USA New York

and USA San Francisco) and in several European countries. Interesting enough some of

these offices are located in other knowledge regions such as Guangdong the Pearl River

Delta and Shandong in China, Bangalore in India, São Paulo in Brazil and Tokyo in

Japan

14

.

In th

e context of the US states, California, the powerhouse of US knowledge economy,

has been one of the most proactive through the activity of Governors and of the

California Technology, Trade and Commerce Agency and its network of trade offices

abroad (Tokyo, London, Frankfurt, Hong Kong, Mexico City, Shanghai, Taipei,

Johannesburg, Seoul, Singapore) until 2003 when the agency was dismantled. But

many other States such as Florida, New York, Nebraska, North Dakota, Kentucky or

Colorado have followed the same path and are also active internationally, under the

leadership of their Governors who perform the role of economic ambassadors seeking

to promote the competitiveness of their States in the global economy and to boost their

own political profile

15

.

Another interesting example is Catalunya which enjoys a high degree of autonomy in

domestic affairs and has developed since the late 1980s a very active paradiplomacy

that promotes its specific economic and cultural interests in the international arena

through the activities of the network of external offices managed by COPCA (Consorci

de Promoció Comercial de Catalunya) participated by the Catalunya Government,

Chambers of Commerce, industry sectoral associations and export associations. These

entities jointly created and manage the network of 35 external trade offices located in

31 countries and covering 70 countries around the world

16

, including China (Beijing,

Shang

hai), India (New Dehli), Hong Kong, Singapore, Brazil (São Paulo) or the USA

(Washington, New York, Los Angeles) at the same time it directly supports firms at

home through training and assistance for the development of their international/export

departments. Moreover, bilateral relations with States and other Non-Central

Governments are one of the priorities leading to the signature of international

agreements in a variety of areas ranging from trade, investment, education, culture,

science and technology or health.

14

See Invest in Bavaria, State Agency (http://www.invest-in-bavaria.de/en/bavarias-foreign-

representations/)

15

A good example of this “profile-boosting strategy” has been California’s Governor Schwarzenegger

signa

ture of an agreement on climate change with British Prime Minister Tony Blair in 2006. On US states’

paradiplomacy see McMillan, Samuel Lucas (2008). “Subnational Foreign Policy Actors: How and Why

Governors participate in US Foreign Policy” in Foreign Policy Analysis, 4, 227-253. For example,

California’s Governor Gray Davis created a secretary of foreign affairs and hosted political leaders from

China, Japan and Singapore. In 2001 alone California hosted foreign dignitaries from 67 countries.

16

See Generalitat Catalunya, COPCA (http:

//www.acc10.cat/ACC10/cat) acceded 3.08.2010

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22

In the case of China the development of the paradiplomacy of the leading Chinese

provinces since the mid-1990s although discrete and with little visibility, has been a

major factor to explain China’s integration in the global economy and her impressive

emergence as a global economic power. Indeed one of the key institutional ingredients

of China’s economic success has been the high level of decentralisation of economic

decision-making from central government to provincial governments and even to local

governments, including in foreign trade and attraction of FDI, since the early stage of

reforms. The paradiplomacy of the most developed coastal Chinese provinces, an

extension of this internal autonomy, was further developed as a consequence of the

implementation of the “Go Global” strategy implemented since 2000 and has gradually

been blessed by the Central Government, encouraged by the positive experience with

Hong Kong’s external autonomy since 1997. Beijing saw this paradiplomacy as useful

and complementary insofar it could function as a mechanism to explore more informal

channels with economic partners and nurture special relationships; mobilize the

overseas Chinese business communities; and even as a solution to manage economic

relations with countries which have no diplomatic relations with the PRC.

Guangdong Province has been probably the pioneer and developed since the mid-

1990s, under the coordination of the Foreign Affairs Office of the Guangdong Provincial

Government, special relations with some “sister provinces” in various continents. As far

as Europe is concerned Guangdong developed paradiplomacy relations with 7 European

Provinces/Regions: Utrecht (2002), with initiatives in the areas of environmental

protection, agriculture, and trade; Skane (Sweden) 1997, especially exchanges in

education, environment and medicare; Alpes Cote d’Azur (2000); Catalonia (2003);

Fyn Region (Denmark) 2004; State of Bavaria (2004). This special relationship involved

the organisation of trade missions, the creation of permanent trade and investment

offices such as the offices opened by Catalonia and Utrecht (jointly set up with Dutch

Chamber of Commerce the Holland House in Guangzhou), the organisation of

investment promotion seminars, participation in trade fairs etc.

There are also more recent but interesting examples of other provinces belonging to

the other growth pole of the Chinese economy, the Yangtze River Delta which have

invested in building preferential ties with specific European regions. In the case of

Jiangsu, the Provincial Government opened 5 Economic and Trade Offices in Europe

with the headquarters located in Dusseldorf in 1996 followed by the offices in Paris,

Chelmsford - Essex County and East England (UK), Tilburg – Province of Noord-Brabant

(Netherlands) and Stockholm (Sweden)

17

. Specific European regions have also

estab

lished their own trade offices in Nanjing, capital of Jiangsu, like Essex County, the

German Landers of Nordrhein Westfalen and Baden-Wurttemberg, through Baden-

Wurttemberg International

18

, or the Paris Department of Haute Seine. For obvious

reasons Shanghai is an important location of trade and investment offices from the

paradiplomacy of EU regions having developed special relations with Barcelona, Milan,

Rotterdam, Hamburg, Liverpool, Marseille, Antwerp.

17

The intensity of paradiplomacy initiatives is rapidly increasing. For example the Giangsu Provincial

Depar

tment of Trade and Economic Cooperation organized several investment seminars in France, Italy,

Germany, Belgium and Britain between 21-31 May 2007, involving more than 100 entrepreneurs from

Jiangsu. This initiative alone led to the signature of investment contracts worth US$ 1.3 billion and import

and export contracts of more than US$ 100 million (see http://www.china-jiangsu.org/news.htm

).

18

Illustrating this increasingly closer relationship between the two regions, Baden-Wurttemberg and

Shanghai created a joint portal in the Internet (http://www.bw.shanghai.de/portal.jsp).

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Another case in point is the special relationship between the Lander of Bavaria and

Shandong Province which developed special ties in terms of mutual investment

promotion, but also cultural exchanges and even swap and training of civil servants.

Bavaria has created the State of Bavaria Shandong Office in 1997 and in September

2006 the Shandong Provincial Government opened in Munich the Business

Representative Office of Shandong with the blessing of China’s Central Government.

However, it should be stressed that this paradiplomacy does not concern exclusively

the Provincial level, there are also paradiplomacy initiatives at the municipal and county

levels contributing to a much more complex picture, especially because a minimum

level of coordination that exists between Central and Provincial Governments is much

more difficult to ensure in relation to lower levels of government.

In the case of Brazil the paradiplomacy of the Brazilian States, called “federated

diplomacy”, is a recent phenomenon pioneered by the States of Rio de Janeiro and Rio

Grande do Sul in the late 1980s followed by São Paulo, Paraná, Baía or even other

states involved mainly in transborder paradiplomacy with neighbouring states –

Roraima, Acre, Amazonas e Amapá

19

. The Federal State has recognised and to some

exten

t favoured the increasing international proactivity of sub-national governments

and tried to set up a coordination mechanism in 1997, the “Assessoria de Relações

Federativas” between the Itamaraty and the state and municipal governments in order

to ensure there was no major contradictions between national foreign policy and

paradiplomacy initiatives

20

. In addition the Ministry of Foreign Affairs has created 8

representation offices in various states and regions to operationalise the process which

constitutes an innovative solution. This can be seen as an act of legitimisation of

paradiplomacy by the central government. The most recent trend has been the

intensification of paradiplomacy relations, anchored in bilateral agreement, between

Brazilian States and Chinese Provinces: São Paulo-Shanghai, Baía-Shandong, Pará-

Sichuan, Paraná-Hainan, Mato Grosso-Jiangxi.

Looking at these different experiences it is possible to point out some conclusions

concerning the nature, dynamics and impact of paradiplomacy at present.

First, it should be stressed that paradiplomacy is not an homogeneous phenomenon on

the contrary has a heterogeneous nature. On the one hand this is the result of the

coexistence of different types of paradiplomacy as argued by Duchacek identifying

three different types of paradiplomacy according to its contents and regional scope: (i)

transborder regional diplomacy (or micro-regional), referring to transborder relations

between geographically contiguous NCGs which was initially the dominant form (ii)

transregional paradiplomacy (or macro-regional) between NCGs which are not

contiguous and (iii) global paradiplomacy, involving distant players, including sovereign

states and touching all issues in the international system, including security,

international trade etc

21

. I would argue that another type of paradiplomacy should be

19

See Francisco Gomes Filho and Alcides Costa Vaz (2008). “Paradiplomacia no contexto da Amazonia

brasileira – estratégias de desenvolvimento regional do Estado de Roraima”. In Ci & Desenvolvimento,

Belém, vol. 4, nº 7, jul-dez 2008: 155-165.

20

See Decree 2.246/1997 República Federativa do Brazil; On Brazil’s paradiplomacy see Gilberto Rodrigues

(2006

), "Política Externa Federativa. Análise de Ações Internacionais de Estados e Municípios Brasileiros".

CEBRI Tese, Rio de Janeiro, CEBRI.

21

See Michelmann in Hans Michelmann, and Soldatos (1990) (ed), Feder

alism and international relations –

the role of subnational units, Clarendon Press: 299-312 and Duchacek, “Perforated sovereignties: towards

a typology of new actors in international relations” in Michelmann (ed.) Federalism and International

Relations: 1-33.

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identified “multilateral paradiplomacy” that refers to the participation of some sub-

national governments in multilateral organisations and the production of multilateral

rules being the best example Hong Kong. These different types of paradiplomacy have

different impacts both on the international system and national foreign policy. Whereas

transborder regional paradiplomacy does not raise much controversy and is accepted

and even promoted by central governments, transregional and, above all, global

paradiplomacy is more likely to raise tensions and tend to be regarded with suspicion

by central governments. In addition the more we move towards complex and

demanding global paradiplomacy or multilateral paradiplomacy more robust

institutional and financial capacity is required.

On the other hand, I would argue that a major distinction must be drawn between a

permanent and structured modality of paradiplomacy, mainly developed by the richest

knowledge regions, developed according to a long term strategy, and sporadic and non-

structured paradiplomacy activities involving the use of specific instruments for short-

term purposes. There is an important qualitative difference between these two

modalities which has to be acknowledged with clear implications for the density of the

international status of sub-national governments.

Second, concerning the conditions of success, in spite of the diffusion and explosion of

paradiplomacy, the practice of a robust, effective and consistent paradiplomacy is still

strongly associated with, and somehow restricted to rich and powerful knowledge

regions operating within States, federal or unitary, possessing a considerable level of

decentralisation. These are the sub-national governments that have the financial

means, the human resources, institutional capabilities and the level of domestic

autonomy to engage in complex international relations. In this context it should be

stressed that domestic autonomy is a necessary but not a sufficient condition. The

degree and dynamics of substantive external autonomy is fundamentally determined by

the complex interplay between three different factors: SNG own institutional capacity

and strategy to act internationally; the pattern of relations with the Central

Government and the mechanisms and level of control exerted by the former; the

attitude and recognition of external players and willingness to interact on the

international stage. In short, there are different conditions of success that interact

which include not only institutional conditions related to level of decentralisation and

economic conditions concerning the resources and strengths of regions, but also

political conditions, related to the attitude of central governments, and regional

leadership conditions

22

.

Third

, the concerns over the dysfunctional nature of paradiplomacy and the risks of

conflicts between central governments and sub-national governments expressed in the

1990s by authors like Soldatos, are no longer justified. This “chaos scenario,” heavily

influenced by the state-centric view, considered paradiplomacy to be a dangerous

derogation of state power and a clear threat to the coherence and unity of foreign

policy: sub-national actors were regarded as trespassers and their behaviour as

deviant. A major shift in perception has occurred. In fact as a result of accumulated

experience, and leaving aside the few exceptions where sub-national governments had

separatist agendas, paradiplomacy is by and large seen as beneficial and a positive

22

These factors have been highlighted by Keating, M. (2000). Paradiplomacy and Regional Networking,

paper presented at the Forum of Federations: an International Federalism

(http://www.forumfed.org/libdocs).

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contribution to strengthen the overall international position of states, strongly

illustrated by the Chinese, Brazilian and Spanish cases, and less and less perceived as a

deviant behaviour. In other words it can be argued that paradiplomacy is no longer

seen as an anomaly but on the contrary as a normal and increasingly diffused practice

which central governments have even encouraged and ought to incorporate in their

foreign policy planning

23

.

Fourth, traditional analysis tend to see paradiplomacy as a consequence of globalization

and the need local/regional communities have to respond to new challenges and

increasing uncertainty in order to pursue their specific economic interests in the global

market, to project their cultural identity and to overcome the limitations and rigidities

of traditional central bureaucracies that are slow to adjust to new conditions. However,

it seems more accurate to consider that paradiplomacy is simultaneously a

consequence of glocalisation and a cause, a catalyst of glocalisation. Knowledge

networks are behind the development of paradiplomacy through regional governments.

Building on the fact they are leading poles of innovation, networks aim at enhancing

their competitive position in the global market but also to link up and cooperate with

other knowledge networks abroad. This means that paradiplomacy is not a passive and

defensive response to globalization, on the contrary it is indeed part and parcel of the

process of globalization, it contributes to greater integration in the global market and is

the expression of the multi-level governance paradigm.

Fifth, paradiplomacy is a fundamental source of innovation in foreign policy insofar it

incorporates and anticipates some of the changes in the conception and rationale of

States’ foreign policy that will be brought about by the new knowledge

society/economy paradigm. To start with the abolition of the boundaries between the

domestic and the external levels, there is clearly a continuum, external action is just

the extension of domestic network activity and should involve the same players. This

also implies a more holistic approach and greater coherence and coordination between

domestic policies and foreign policy as well as greater transparency and citizen

participation. Moreover, it shows that external action will be more and more a multi-

actor, multidimensional process where public, private and third sector actors have to

engage and combine their different skills in the context of long term partnerships.

Knowledge networks involving coordination and cooperation between governments,

business, NGOs, academia, trade unions becomes paramount for effective external

action not only in terms of implementation but also in terms of policy conception.

Furthermore, paradiplomacy highlights the growing importance of informal channels

and procedures and the role of Soft Law in the regulation of the international system

which ensures flexibility and adaptability to adjust to uncertainty and rapid change.

Finally, new global issues involve increasingly technical and complex issues requiring

expertise which governments lack therefore requiring the active involvement and

contribution of private firms, universities, research institutions. In this respect it is

relevant to highlight the new role of global transnational networks in international rule-

23

In the same line Michael Keating (2000). Parad

iplomacy and Regional Networking, paper presented at the

Forum of Federations: an International Federalism (http://www.forumfed.org/libdocs). Andrew Petter

referring to the Canadian experience clearly states that “…Canadian Governments have facilitated and

encouraged paradiplomacy over the years as a means of accommodating nationalist sentiments, regional

interests and economic pressures” – see Canadian Paradiplomacy in practice: confessions of a

paradiplomat, paper presented to the Conference The International Relations of the Regions: sub-national

actors, para-diplomacy and multi-level Governance, Zaragoza, 2006 (mimeo).

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creation, and renewed concern with global rule-implementation, which pressuposes the

active involvement of sub-national actors and knowledge regions insofar as they can

adapt global rules to local specificities.

Sixth, paradiplomacy is a strategic channel for the creation and consolidation of the

“soft power”

24

of States not only because of the informal channels and instruments it

uses but also because of the fundamental relevance of the issue-areas addressed by

paradiplomacy, namely trade, investment and economic cooperation; education and

human capital; migrations; science and technology; culture and identity. All of these

are crucial dimensions of “soft power” and this is the main reason behind the open-

minded and tolerant attitude of China’s Central Government with regard to some

Chinese Provinces’ paradiplomacy the more so as this was combined with the Chinese

Diaspora strategy, another crucial instrument of China’s soft power. Dense and robust

knowledge regions, internationally proactive are the main builders of soft power in the

context of glocalisation.

However, despite internationally proactive knowledge regions are a fundamental tool to

sustain systemic competitiveness in the global economy and consolidate soft power,

this is a phenomenon that involves a limited number of states. Still, the majority of

states are excluded from this trend as they have been slow to adapt to the new

paradigm, both in terms of changes in governance models and policies, and failed to

create the necessary conditions to facilitate the emergence of knowledge regions. On

the contrary, they tend to hold on to very centralized systems believing that only a

strong centre can respond to the new threats and face the challenges of glocalisation.

A good example is the case of Portugal where a historical centralist tradition has been

somehow reinforced by the dynamics of the EU integration process. As a result Portugal

is today one of the most centralised states in Europe a major factor preventing the

emergence of dynamic regions.

Portugal went through a vivid debate on regionalisation and decentralisation in the late

1990s as a consequence of the process of referendum on regionalisation held in 1998

which culminated in the rejection of the proposal to create 8 administrative regions

along the lines foreseen in the law

25

. The creation of administrative regions was a

bindi

ng principle already enshrined in the 1976 Constitution but never implemented. In

spite of possessing since 1976 two autonomous regions, Madeira and Azores, the

continental part of the Portuguese territory has been managed under a fairly

centralised system making Portugal one of the most centralised states in Europe

26

.

The terms of the debate in 1998 analysed in more detail elsewhere

27

and the

arguments put forward revolved around the implications of regionalisation for the

reform of public administration, national cohesion and the impact on development

24

In the sense used by Joseph Nye (2004). Soft Power: the means to success in world politics, Public

Affairs.

25

Law 19/98 which defined 8 regions: Entre Douro e Minho; Trás-os-Montes e Alto Douro; Beira Litoral;

Beira Interior; Estremadura e Ribatejo; Lisboa e Setúbal; Alentejo; Algarve.

26

See Hahan J.P. and Loo, M.V. (1999). A Seminar Game to Analyze Regional Governance in Portugal,

Lisboa, FLAD e Rand Corporation. The level of centralisation can be measured by the share of tax revenue

controlled by the Central Government which reached 93% in Portugal (Central government+social

security) which means that the share of local governments in total tax revenue was 6.2% in 2005, the

same as in 1998 see OECD Revenue Statistics 1965-2006, 2007, Paris ; OECD Tax and the Economy –

comparative assessment of OECD countries 2001

27

See André Freire and Michael Baum (2001). “O referendo Português sobre a Regionalização numa

persp

ectiva comparada” in Penélope, nº 24: 147-178.

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asymmetries between regions, the organisation and coordination between municipal

governments and the risks of corruption, nepotism and intensification of political

clientelism. In short, regionalisation was then seen strictly as a domestic issue and

analysed in the same logic prevailing in the 1970s when the issue was first raised, as if

the world had not changed, and taking no account of the experiences and results of

other EU countries. Surprisingly there was no reflection on the dynamics and challenges

of the knowledge society/economy and its implications for governance.

In the last decade the debate on regionalisation has been frozen and no real advances

were made in terms of promoting descentralisation. The opportunity costs of no-

regionalisation have been considerable if we look at Portugal’s fragile capacity to

respond to the challenges of globalization and the transition to the knowledge society.

Regionalisation should not be approached from a restrictive and outdated domestic

perspective but from a wider perspective as part and parcel of Portugal’s strategy to

deal with globalization and enhance its competitiveness in the global economy. It

should be stressed that competitiveness is a systemic process and so the

competitiveness of the Portuguese economy can not be confused with the

competitiveness of a few Portuguese large firms. As long as the core nucleus of the

Portuguese productive system, the SMEs, is not involved the sustained competitiveness

of the Portuguese economy is at risk.

The inexistence of knowledge regions in Portugal is the main cost of no-regionalisation

and a major impediment for Portugal’s capacity to foster the process of innovation and

compete in the global market. As argued earlier, the regional level is the optimal level

for the creation of knowledge networks that produce and diffuse tacit knowledge.

Although regionalisation is not a sufficient condition, it is certainly a necessary

institutional and political condition for the emergence of knowledge regions. In addition,

it provides interesting opportunities for the development of paradiplomacy in Portugal,

an important tool to complement traditional foreign policy and to explore new channels

and opportunities in an increasingly complex international system. The potential

contributions of the paradiplomacy of future regions are varied but I would stress the

capacity to: facilitate the redefinition of relations with the Spanish Autonomous

Communities and support a more proactive strategy towards them; explore new ties

with other European regions; respond positively to the paradiplomacy initiatives

developed by Chinese Provinces or Brazilian and Indian States; link up with the

Portuguese diaspora and integrate it as strategic players and a major asset in the

globalized world.

Conclusions

Knowledge regions are strategic leading players in the process of transition to the

knowl

edge society/economy and the main competitors in the global economy. If it is

true that they allowed advanced economies to retain control over the innovation

process and therefore preserve the leadership in the world economy, it is also true that

knowledge regions are a key factor behind the rise of the new emerging economic

powers, namely China, Brazil and India, which challenge the dominance of the US, EU

and Japan. Knowledge regions became also new actors in the international system, still

with an informal and fluid status, as their governments are increasingly active

internationally through organized and permanent paradiplomacy actions and structures.

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This external dimension of knowledge regions, in general overlooked, is a fundamental

ingredient of their success and capacity to pursue their specific economic, political,

scientific or cultural interests and project their identity.

Paradiplomacy practised on a permanent and structured basis by sub-national

governments of the most advanced knowledge regions, or on sporadic and non-

structured basis by other regions, is mainly focused on low politics areas, ranging from

trade and investment, to science and technology, education, culture issues and involves

the use of both formal instruments, such as international agreements or trade offices,

and informal instruments. Far from being marginal areas, these are on the contrary

crucial issues for the building of knowledge society and for strengthening the soft power

of states. One of the key arguments put forward is that paradiplomacy is a strategic

channel for the creation and consolidation of soft power, the capacity to influence

others and shape their behaviour by persuasion and attraction rather than coercion.

The knowledge society and the logic of knowledge networks have important

consequences in terms of changes in foreign policy and the way in which states interact

with each other and with non-state actors. In this respect it is argued paradiplomacy is

an important source of innovation and somehow anticipates some of the inevitable

changes to come in central governments’ external action, namely the abolition of

boundaries between the domestic and the international levels, requiring an integrated

approach and greater coherence and coordination between domestic policies and

foreign policy; the implementation of a multi-actor process highly participated both in

terms of formulation and implementation which is the effective way to respond to the

increasing complexity of both the issues-areas and the international community; the

increasing relevance of informal channels and the role of Soft Law and transnational

networks in international regulation.

Contrary to concerns expressed over the risks of conflicts between central and sub-

national governments and threats to the unity of state foreign policy, experience

demonstrates that paradiplomacy is a positive factor and contributes to strengthen, not

weaken, the international position of states and overcome some of its vulnerabilities, in

particular to expand the soft power of states. As a consequence paradiplomacy ceased

to be seen as unorthodox and marginal and tends to be gradually perceived as a

normal activity with a fundamental strategic importance insofar knowledge regions are

clearly the best positioned brokers between the global and the local, with a crucial role

to play in the improvement of Global Governance, both in rule-setting and rule-

implementation, and the operation of the multi-level governance system.